01-27-18 08:42 PM
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  1. Chuck Finley69's Avatar
    I agree....its all about those interest payments.
    Actually it's about the long term stock price.
    01-01-18 06:02 PM
  2. JSmith422's Avatar
    Actually it's about the long term stock price.
    There in lies the disagreement. It SHOULD be about the long term stock price, but markmall is arguing that in reality it's been first and foremost about making interest payments.
    01-01-18 08:12 PM
  3. Chuck Finley69's Avatar
    But it's about the stock price. The debt covenants would be in place with any lender or debt issuer. The conflict of interest was the very thing shareholders had to agree to when they agreed to accept the loan from Watsa/Fairfax. He made the loan to protect his shares and by protecting his shares with his loan, he protected everyone's shares. Anyone else that wanted to loan money to BlackBerry could have countered with a better offer.. No one else did.
    Troy Tiscareno likes this.
    01-01-18 08:28 PM
  4. markmall's Avatar

    Yes, when they have majority control, as long as they don't break any laws or regulations, they get to run company as they want, as they are majority owners.
    How can you continue saying this? No, that is not correct.

    Imagine if Watsa owned a competing company and had management intentionally make BlackBerry fail -- but pretend to compete for avoid upsetting regulators -- so his other company would have a monopoly. He owns 100% of the other company and only 51% of BlackBerry so he wants to move all that business from Blackberry to his other company because he will make more money that way.

    Do you think this would be legal just because he owns 51% of BlackBerry? How about legal for Chen as the CEO?

    Posted via CB10
    01-02-18 02:37 AM
  5. markmall's Avatar
    There in lies the disagreement. It SHOULD be about the long term stock price, but markmall is arguing that in reality it's been first and foremost about making interest payments.
    I think you just used the Socratic method to great effect.

    Posted via CB10
    01-02-18 02:38 AM
  6. Dunt Dunt Dunt's Avatar
    How can you continue saying this? No, that is not correct.

    Imagine if Watsa owned a competing company and had management intentionally make BlackBerry fail -- but pretend to compete for avoid upsetting regulators -- so his other company would have a monopoly. He owns 100% of the other company and only 51% of BlackBerry so he wants to move all that business from Blackberry to his other company because he will make more money that way.

    Do you think this would be legal just because he owns 51% of BlackBerry? How about legal for Chen as the CEO?

    Posted via CB10
    Imagining the "what if"..... can go on and on and on, just like this thread.

    In the end, this thread is about there being some alternative OSs out there for sale. Those that feel they are being left out by BlackBerry's move to end support for BB10 in a few years (combined with most everyone else's lack of supporting it). Users will now be free to see what other marginally supported and probable soon to be EOL products they can latch a hold of.
    anon(9803228) likes this.
    01-02-18 08:41 AM
  7. Chuck Finley69's Avatar
    How can you continue saying this? No, that is not correct.

    Imagine if Watsa owned a competing company and had management intentionally make BlackBerry fail -- but pretend to compete for avoid upsetting regulators -- so his other company would have a monopoly. He owns 100% of the other company and only 51% of BlackBerry so he wants to move all that business from Blackberry to his other company because he will make more money that way.

    Do you think this would be legal just because he owns 51% of BlackBerry? How about legal for Chen as the CEO?

    Posted via CB10
    Now we've gone into scenarios that didn't happen and that aren't happening. Non-disclosure would make the actions illegal. Let's stick to what did happen and the fact that everything done has been done to meeting the fiduciary rules as have and continue to be examined by regulators as they do for every publicly traded company.

    Hypothetical situations are the realm of arguments that can't be won on the basis of the real facts in real life.
    01-02-18 09:46 AM
  8. markmall's Avatar
    Now we've gone into scenarios that didn't happen and that aren't happening. Non-disclosure would make the actions illegal. Let's stick to what did happen and the fact that everything done has been done to meeting the fiduciary rules as have and continue to be examined by regulators as they do for every publicly traded company.

    Hypothetical situations are the realm of arguments that can't be won on the basis of the real facts in real life.
    Hypothetical questions can be very useful to illustrate certain complex principles -- such as fiduciary duties owed to minority shareholders by majority shareholders, board members and management.

    Posted via CB10
    01-02-18 06:40 PM
  9. Chuck Finley69's Avatar
    Hypothetical questions can be very useful to illustrate certain complex principles -- such as fiduciary duties owed to minority shareholders by majority shareholders, board members and management.

    Posted via CB10
    But the illustrations are just that, hypothetical answers because the minority shareholders don't have the votes to override the majority.

    Like playing what if with elections? Trump is still president, before him Obama and before him Bush. What does it matter about the past other than remembering it so it hopefully doesn't repeat itself..
    01-02-18 11:07 PM
  10. markmall's Avatar
    But the illustrations are just that, hypothetical answers because the minority shareholders don't have the votes to override the majority.

    Like playing what if with elections? Trump is still president, before him Obama and before him Bush. What does it matter about the past other than remembering it so it hopefully doesn't repeat itself..
    I don't know about Canada but in the U.S just because the minority can be out voted every time doesn't mean that the minority doesn't have rights. JSmith made this point earlier. We have a legal system for this purpose.

    Also, as I said before I don't think we will ever see a shareholder lawsuit on this issue because Chen's decisions had at least a veneer of validity to them and the handset business easily could have failed anyway.

    Since we're now repeating ourselves maybe we should stop. Maybe I will look for some of those articles about the deal from 2013 at some point.

    Posted via CB10
    01-03-18 01:54 AM
  11. JSmith422's Avatar
    But the illustrations are just that, hypothetical answers because the minority shareholders don't have the votes to override the majority.

    Like playing what if with elections? Trump is still president, before him Obama and before him Bush. What does it matter about the past other than remembering it so it hopefully doesn't repeat itself..
    Markmall has a legitimate point though. Just because a minority shareholder gets out voted by a majority shareholder doesn't mean that the minority shareholder isn't owed certain duties from management, or that such a vote would absolve management of any "self-dealing" liabilities. If a minority shareholder wants to bring action against blackberry, it's BOD, or certain individuals for self-dealing they'd be entitled to do so......and before anyone says anything, NOBODY knows how that would play out in court, that's why we have discovery.
    01-03-18 03:50 AM
  12. Chuck Finley69's Avatar
    I don't know about Canada but in the U.S just because the minority can be out voted every time doesn't mean that the minority doesn't have rights. JSmith made this point earlier. We have a legal system for this purpose.

    Also, as I said before I don't think we will ever see a shareholder lawsuit on this issue because Chen's decisions had at least a veneer of validity to them and the handset business easily could have failed anyway.

    Since we're now repeating ourselves maybe we should stop. Maybe I will look for some of those articles about the deal from 2013 at some point.

    Posted via CB10
    Markmall has a legitimate point though. Just because a minority shareholder gets out voted by a majority shareholder doesn't mean that the minority shareholder isn't owed certain duties from management, or that such a vote would absolve management of any "self-dealing" liabilities. If a minority shareholder wants to bring action against blackberry, it's BOD, or certain individuals for self-dealing they'd be entitled to do so......and before anyone says anything, NOBODY knows how that would play out in court, that's why we have discovery.
    Anybody can sue anybody for anything in the USA. It's a tactic used by a minority of as little as one to raise awareness of a perceived injustice. Minority shareholders will use this specific tactic in order to shift possible support over from the opposition.

    This started out as comments that Chen/Watsa had done something wrong either legally or regulatory. Then we moved into other areas regarding future management conflict of interest which has now evolved into hypothetical situations of what types of rights minority shareholders have when in conflict with majority shareholders.

    It's pretty simple, in the USA, and probably Canada as well, since international law has to have some general agreements that allow multinational shareholders and corporations basic protections.

    Actions that are taken by management has to benefit everyone in specific class equally. If someone buys up existing debt of any impaired company, once it becomes a material amount that has to be disclosed. Can a member of a class use this for power leverage against the others in a lower class? Yes. This strategic maneuvering is allowed because companies have chosen to issue debt and equity publicly to raise capital.

    Prem Watsa, Warren Buffett, Carl Icahn and multitudes of others between have legal counsel to advise in how to use tactics like this for gaining control of companies that each corporate leader wishes to own parts of and possibly own completely.

    The fiduciary role of the BOD and corporate executives is to choose a strategy to maximize shareholder return. They cannot violate security laws and/or regulations in the process as that exposes those parties to criminal and/or civil litigation.

    Your rights as minority shareholders are to wage a proxy fight and convince people to support your strategy of BB10, device hardware in general or embark on some other business strategy like building fidget spinners with the BlackBerry logo.

    Tactics like these were used heavily in the 80s by minority shareholders to shake up the executive suites of mismanaged companies. This is why many regulations are now in place that protect all shareholders better regarding fiduciary duties.

    That's also why private equity companies take companies private, equity and debt, with cash they've raised. That way they can operate company as they wish and not answer to anyone but themselves.

    BlackBerry executives and the BOD mismanaged the development and implementation of BB10 from the very beginning. This was a disaster that should have been forseen before $1 was spent past initial business plan analysis. The mistake in the beginning was not protecting shareholders equity and BBOS since it was providing bulk of monthly revenue and depended on maintaining better carrier relationships.

    Hardware was dead long before Chen because the carriers supported companies that allowed those carriers to divorce BlackBerry.
    anon(9803228) likes this.
    01-03-18 09:59 AM
  13. markmall's Avatar
    Actions that are taken by management has to benefit everyone in specific class equally. If someone buys up existing debt of any impaired company, once it becomes a material amount that has to be disclosed. Can a member of a class use this for power leverage against the others in a lower class? Yes. This strategic maneuvering is allowed because companies have chosen to issue debt and equity publicly to raise capital.
    I don't think so. First, debt holders are not a class of anything. They are not shareholders. Also, where does it say that in order to issue debt, you have to give board seats to your creditors? Most companies hire investment banks who then sell bonds to investors when they want to raise debt. Smaller companies work with banks. They don't cede control of the company to lenders, because lenders would run it completely differently.

    I understand that Watsa is a mixture of equity and debt but his interests are not fully aligned with the shareholders.
    01-05-18 04:45 PM
  14. Chuck Finley69's Avatar
    I don't think so. First, debt holders are not a class of anything. They are not shareholders. Also, where does it say that in order to issue debt, you have to give board seats to your creditors? Most companies hire investment banks who then sell bonds to investors when they want to raise debt. Smaller companies work with banks. They don't cede control of the company to lenders, because lenders would run it completely differently.

    I understand that Watsa is a mixture of equity and debt but his interests are not fully aligned with the shareholders.
    They don't have to be fully aligned. Shareholders can't agree on everything so it's the golden rule. The person with the most gold makes the rules. As far as board seats go, board members aren't exclusive to shareholders. The company was on the brink of failure. Closer to filing bankruptcy than most realize. The board knew this and they knew that creditors and other vulture capitalists were circling. It's a reason, no actual buyers emerged and even Fairfax pulled their offer. Any lines of credit and other short-term lending the company utilized contains debt covenants which if violated, then could trigger bankruptcy proceedings. Very likely, this caused many interested parties to predict, assets would be purchased much cheaper.

    Again, BB was in a bad position with no realistic options. Third down pass was dropped in the end zone, quarterback was pulled out injured, field goal ties game, and best kicker in the league joined team day before the game.

    In bankruptcy, you pretty much cede all control to lenders and equity is wiped out. Shareholders chose Fairfax and Watsa because it was the only deal on table.
    01-05-18 05:44 PM
  15. conite's Avatar
    The only thing for sure, is that had Chen & Co. NOT scrapped devices, there would not only have been a lawsuit from shareholders, but likely an investigation from the SEC for gross incompetence.
    anon(9803228) likes this.
    01-05-18 06:57 PM
  16. JSmith422's Avatar
    The only thing for sure, is that had Chen & Co. NOT scrapped devices, there would not only have been a lawsuit from shareholders, but likely an investigation from the SEC for gross incompetence.
    Conjecture in its purest form.
    elfabio80 and DonHB like this.
    01-05-18 10:26 PM
  17. Chuck Finley69's Avatar
    Conjecture in its purest form.
    How's that conjecture? This kind of behavior is exactly the kind of fiduciary behavior that you've brought up that executive management and the board of directors have to demonstrate.
    01-06-18 06:11 PM
  18. JSmith422's Avatar
    How's that conjecture? This kind of behavior is exactly the kind of fiduciary behavior that you've brought up that executive management and the board of directors have to demonstrate.
    con·jec·ture/kənˈjekCHər/
    noun
    an opinion or conclusion formed on the basis of incomplete information.

    Unless he has some inside knowledge from shareholders and the SEC, then it's conjecture. Plain and simple.

    I've made the point many times, but nobody knows what would have happened or could have happened with Blackberry. If blackberry never brought Chen in would bb10 have survived? Maybe, maybe not. Would the company have gone bankrupt? Maybe, maybe not. Would shareholders have filed suit? Maybe, maybe not. It's all speculation and conjecture. All we know is what did happen.

    But what Markmall is talking about is exactly that, what did happen. His point is that there appears to be a conflict of interest. You say this has been disclosed and doesn't matter. It may not matter to many, but it obviously matters to some.
    01-07-18 05:43 AM
  19. Chuck Finley69's Avatar
    con·jec·ture/kənˈjekCHər/
    noun
    an opinion or conclusion formed on the basis of incomplete information.

    Unless he has some inside knowledge from shareholders and the SEC, then it's conjecture. Plain and simple.

    I've made the point many times, but nobody knows what would have happened or could have happened with Blackberry. If blackberry never brought Chen in would bb10 have survived? Maybe, maybe not. Would the company have gone bankrupt? Maybe, maybe not. Would shareholders have filed suit? Maybe, maybe not. It's all speculation and conjecture. All we know is what did happen.

    But what Markmall is talking about is exactly that, what did happen. His point is that there appears to be a conflict of interest. You say this has been disclosed and doesn't matter. It may not matter to many, but it obviously matters to some.
    There are no scenarios where BB10 would or could have survived. No one has ever made offer to buy company or license BB10 that has been completed in any way. This was offered before Chen was hired. BB10 has always been there, but the company doesn't and didn't have the money to support and develop the OS. Just to stop losing enormous amounts of money, BB10 staff was either let go or redeployed to profitable areas.

    The conflict of interest really isn't conflict since it was disclosed as part of loan offer. It would be issue, only if not disclosed, or if loan was accepted when other available options existed. Nobody else stepped forward to help company. No lending institutions of any kind were going to loan BlackBerry any money if bankruptcy looming on horizon.

    This company had gone past the stage of possibilities for happy BB10 ending and was in the stage of probabilities for bankruptcy unless it stopped BB10. The end of BB10 was already written at introduction when it was evident the ecosystem would never satisfy consumer demand. That was beyond the control of BlackBerry. Customers of major companies were instructed daily to buy Android/IOS hardware if apps desired. These companies told customers, they weren't supporting a new fifth OS. Many already supported Windows and BBOS.

    Chen's turnaround looks simple in hindsight. It was a tightrope walk because the company needed more cash for a buffer and was only given amount to allow for no significant margin of error.

    At this point, many including myself have explained in detail, the reasons for why other strategies would fail and with the reasons why.

    Perhaps you or markmall could explain in similar detail how you in the role of management could have followed a realistic different path within the actual limitations the company faced.
    01-07-18 06:39 AM
  20. Stefan Budimirovic's Avatar
    I had one idea

    One thing that BlackBerry can do is to create something that no one did before. There is still some of old good BlackBerry phones out there and I belive they are still in some of the drawers. Let's say 9900 Bold, Z10, Z30, Passport, Leap. They have a hardware that can run maybe not latest android but BlackBerry can create some new "BlackBerry lite system". All they need is create a team of ten people and make all most common apps from Play store market. Imagine that you can use faster Facebook, Twitter, Instagram etc. . . on old Bold which battery goes longer than most of the android phones. Those phones worth now 20 or 50$. BlackBerry can put an update on that system for let's say 5 or 10$ and all the apps can cost some 1 or 2$.

    I would love to use my old Bold touch screen fat boy once again with all great apps for totally 20+ dollars

    All the best and never give up of your dreams in this New Year
    01-07-18 09:00 AM
  21. conite's Avatar
    I had one idea

    One thing that BlackBerry can do is to create something that no one did before. There is still some of old good BlackBerry phones out there and I belive they are still in some of the drawers. Let's say 9900 Bold, Z10, Z30, Passport, Leap. They have a hardware that can run maybe not latest android but BlackBerry can create some new "BlackBerry lite system". All they need is create a team of ten people and make all most common apps from Play store market. Imagine that you can use faster Facebook, Twitter, Instagram etc. . . on old Bold which battery goes longer than most of the android phones. Those phones worth now 20 or 50$. BlackBerry can put an update on that system for let's say 5 or 10$ and all the apps can cost some 1 or 2$.

    I would love to use my old Bold touch screen fat boy once again with all great apps for totally 20+ dollars

    All the best and never give up of your dreams in this New Year
    Ah yes, the "develop and maintain a mobile OS from a garage and a handful of interns idea". I think we've covered that.
    Dunt Dunt Dunt likes this.
    01-07-18 10:54 AM
  22. kvndoom's Avatar
    Denial

    noun de·ni·al \ di-ˈnī(-ə)l , dē- \

    6 psychology : a defense mechanism in which confrontation with a personal problem or with reality is avoided by denying the existence of the problem or reality
    01-07-18 11:29 AM
  23. kvndoom's Avatar
    Delusion

    noun de·lu·sion \ di-ˈlü-zhən \

    2 : a false belief regarding the self or persons or objects outside the self that persists despite the facts and occurs in some psychotic states
    01-07-18 11:33 AM
  24. Smokeaire's Avatar
    Dead horse beating.
    eshropshire likes this.
    01-07-18 11:49 AM
  25. DrBoomBotz's Avatar
    Dead horse beating.
    The horse is alive until BlackBerry says it is dead. Oh wait...
    01-07-18 12:22 PM
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