Employees Got the Short End in the Good Technology Sale

Very interesting article about Blackberry's acquisition of Good Technology from a NY Times report. In sum, the article claims that the employees of Good took a real hit while the Investors and Preferred Stock Holders seem to have made out pretty well.

Wonder how this will impact the numbers for Blackberry in the long term but certainly seems like they have taken on a lot of unhappy employees if the article is right:

BlackBerry Ltd Acquisition of Good Technology Drove the Latter's Employees to Rage

Sounds about right for a lot of companies living off the VC teat. Management ends up with preferred stock and the employees get hosed with common stock.

The real issue is employees, and markets, putting too much value in valuation. It's looking more and more like the Dot Com bubble of the turn of the century.


Posted via CB10

Originally Posted by Techno-guy

Very interesting article about Blackberry's acquisition of Good Technology from a NY Times report. In sum, the article claims that the employees of Good took a real hit while the Investors and Preferred Stock Holders seem to have made out pretty well.

Wonder how this will impact the numbers for Blackberry in the long term but certainly seems like they have taken on a lot of unhappy employees if the article is right:

BlackBerry Ltd Acquisition of Good Technology Drove the Latter's Employees to Rage

Employees have jobs, and considering the financial conditions at Good, they are lucky to have their jobs. The VMS were tired of pumping money into Good, and they company was going down. The value of Good last Spring does not matter.

Yes the VMS got their money and rightly so they were the ones who took the financial risk on Good.

Read the title and said "par for the course".

"I don't think that word means what you think it means."

Originally Posted by eshropshire

Employees have jobs, and considering the financial conditions at Good, they are lucky to have their jobs. The VMS were tired of pumping money into Good, and they company was going down. The value of Good last Spring does not matter.

Yes the VMS got their money and rightly so they were the ones who took the financial risk on Good.

Totally agree. There would be NO employees if someone/ group had not taken a risk (which always seems like a sure thing in hindsight) and pumped money into a startup. Factor in employee pay and benefits and other costs of doing business. Did any of the employees share in that financial risk?

You always want to treat your staff properly because without them you have nothing! But when employees have an unreasonable sense of entitlement, it's a bad situation as well.

"I don't think that word means what you think it means."

Originally Posted by rthonpm

Sounds about right for a lot of companies living off the VC teat. Management ends up with preferred stock and the employees get hosed with common stock.

The real issue is employees, and markets, putting too much value in valuation. It's looking more and more like the Dot Com bubble of the turn of the century.


Posted via CB10

They got guaranteed paychecks AND stock. Many people would want such a raw deal. More than likely, they were counting and expecting to spend money they never had. 401k statements and stock valuation statements ARE NOT MONEY.

With that said, it does look like the company was managed with a short term focus. IOW, management was looking for a way out and get as much as possible as well. That is betrayal to the workforce in my opinion. That often hurts value to boot.

As often happens, employee expectations are extremely rosy without an understanding of the true game, the players and the cards being held. And invariably, they got played.

"I don't think that word means what you think it means."

Originally Posted by LoneStarRed

Did any of the employees share in that financial risk?

Actually the top developers did share in the risk, if you consider all the other opportunities that were available to them. That's the risk to BB now. The mediocre developers will say "yeah, ok, at least I have a job". The great developers will now add up what they actually made over the past few years, compare it to what they would have made at the other offers they had, and likely want out.

So BB needs to quickly identity those top developers and make sure they have solid long term incentives to stay. Otherwise the Good product will deteriorate quickly.

You can't make anything good without top talent. And it is definitely a sellers' market for elite talent right now.

@ app developer
In any vertical, top talent is desired and at a premium. Agree that the current climate may well favor talent. However good leadership ( NOT management) does inspire and that word gets around.

There will always need to be a mix of talent, leadership and capital (and worker bees). It has always been thus and it will always be thus.

"I don't think that word means what you think it means."

Originally Posted by LoneStarRed

@ app developer
In any vertical, top talent is desired and at a premium. Agree that the current climate may well favor talent. However good leadership ( NOT management) does inspire and that word gets around.

There will always need to be a mix of talent, leadership and capital (and worker bees). It has always been thus and it will always be thus.

"I don't think that word means what you think it means."

Having been involved in several M&A I can say that idenitifing the top talent in an organization is a key part of the process. Also, a judgment has to be weighed on the importance of keeping the talent vs the cost of retaining they people. Unless you are part of the process of deciding why a company is making th aquisition then it is generally impossible for you to understand why some employees are fought for and others are not retained. For example BlackBerry may have bought Good for their customers and field sales team (This just an example I don't have any details on the Good purchase). If this were the case you would only want to keep a limited part of the Good Development team to create the transition of Good technology into BES 12.

In some cases companies are bought that have older products in a mature market just to milk the products to zero. In that case only a skeletal staff is left in development to do important bug fixes and security updates. They may retain a few sales people. The goal being to retain the maximum amount of maintenance revenue coming in for the lowest possible cost.

Unless you are a key part of the decision making process on doing an aquisition it is generally impossible to know what is key an not. Even if you are part of the process getting it right is hard. Many M&A that seem brilliant at the time wind up being complete busts.

Will be interesting to see if the Good aquisition works for BlackBerry. Personally I think they may have paid to much for a company quickly running out of cash. The MM market right now is in complete flux.There is a big question if there is a market for standalone MM solutions or if they are going to be just part of a more comprehensive management solution.