[richardat]

No big surprises in the media release....would still like to see more detail before concluding anything....though...I don't think it matters at this point.

A quick sleepy glance(trying to see through RIM's continued attempts at sleight of hand) suggest to me that:

-overall phone sales down about a mil.
-they have barely sold ANY bb10 devices - possibly an incredibly low number - I think in worst case it could be signficantly less than 4 mil(!) total - but....lot of variables in that guess, need to think about it when awake lol
-service revenue dropped significantly again, though probably not as badly as last quarter

[Moonbase0ne]

I can't wait to see what kind of positive sugar coating CB tries to put on this. Should be entertaining to read.

[Neil9800]

Possibly a stupid question, but selling companies is not my thing.

If Thor has just announced that BlackBerry have $2.6 billion in cash and no debt, why go private?

Second question, when Prem gets BlackBerry, what happens to that $2.6 billion?

From my Q5

[howarmat]

I think we will have to wait until next week to get more info. The numbers are very cryptic in that they switched the way they report things and didnt really explain it. Heck you go Blair saying that they only sold 600k in Q1 to the end user. Sugarcoating wont happen. No reason for it. We knew what we were going to see as it was.

[njblackberry]

I think we will have to wait until next week to get more info. The numbers are very cryptic in that they switched the way they report things and didnt really explain it. Heck you go Blair saying that they only sold 600k in Q1 to the end user. Sugarcoating wont happen. No reason for it. We knew what we were going to see as it was.

No details, as expected.
As some members here like to say "there is nothing new here" - it is a formal statement, with the same information (of course) released last week.
We will never get any decent information (units sold by type, BES 10 systems in production and not test) or anything else useful.
Potential buyers will have a look at the books in the next 6 weeks and won't say anything. If the $9 "floor" goes down, it is worse than we fear. If the $9 bid is raised, there is some possible goodness left.

[JasW]

Five weeks left after this for something to happen. Or basically all of October. Will Fairfax get financing? Will the Ontario Teachers Pension Fund provide the equity that Fairfax won't? Will some mystery buyer step in?

I wonder what Thor is going to be for Halloween.

[CHIP72]

Five weeks left after this for something to happen. Or basically all of October. Will Fairfax get financing? Will the Ontario Teachers Pension Fund provide the equity that Fairfax won't? Will some mystery buyer step in?

I wonder what Thor is going to be for Halloween.

Thorsten Heins is already kind of scary without a Halloween costume if you ask me.

[richardat]

I think we will have to wait until next week to get more info. The numbers are very cryptic in that they switched the way they report things and didnt really explain it. Heck you go Blair saying that they only sold 600k in Q1 to the end user. Sugarcoating wont happen. No reason for it. We knew what we were going to see as it was.

Yes....more info needed. I don't remember reading the 600,000 analysis....whatever it was, with the new reporting style, one thing it seems we can say is that the ~2.7mil bb10 shipped there was enough to cover sales in that quarter AND much, or all, of this quarter! When you combine that with the write-down - which potentially addresses a very large number of units, it doesn't look good.

[ItsMrMark]

NY TIMES:

The loss mainly reflected a $934 million write-down of a growing inventory of unwanted BlackBerry Z10 phones, the devices that the company had hoped would restore its fortunes, as well as $72 million in charges related largely to layoffs.

[mediadavid]

The question I have, is did BlackBerry have to write off those Z10s now? They've only been on sale 6 months and you can generally expect AT LEAST a years worth of sales for a model, usually more.

It just seems...a bit deliberately sabotagey to write those phones off and incur that debt a few days before this takeover bid came.

Posted via CB10

[Wiki Cydia]

The question I have, is did BlackBerry have to write off those Z10s now? They've only been on sale 6 months and you can generally expect AT LEAST a years worth of sales for a model, usually more.

It just seems...a bit deliberately sabotagey to write those phones off and incur that debt a few days before this takeover bid came.

Posted via CB10

The problem is that no buyer is going to purchase the company with a nearly billion-dollar write-down pending.

[robsteve]

The problem is that no buyer is going to purchase the company with a nearly billion-dollar write-down pending.

They would, but just make the adjustment in the purchase price. In this case BlackBerry was being realistic and just did it themselves.

Keep in mind if they write them down one billion but end up selling them for five hundred million, the next earning report would show that as a five hundred million gain or in reality, a general ledger entry to reverse some of the write off, but effectively the same thing.

[Riaan Smit]

"Unwanted Z10's" does this mean that the Q's are actually selling not that bad?

[njblackberry]

They likely made fewer Q devices based on the reality of Z overproduction.

[ankush77]

its just the movement of confusion and total fall of bb10,fairfax on other side eyeing to win bb and take it private

[ankush77]

don't know whats in the mind of people sitting on power seats of bb ,they are the worst losers on this plant.

[allisos]

I can't wait to see what kind of positive sugar coating CB tries to put on this. Should be entertaining to read.

Here it is.. The most half full view that's possible....

Without the write down, and without laying people off... the company is almost at the break even point. You have cross bbm around the corner, along with "channels" and bbm money lurking... Without altering the way they count phone sales (vs phones shipped), it would have shown an increase in sales of bb10 phones each quarter. The bb7 phones are dying, but everyone expected that. Now that the write down is in the past, and more layoffs are coming... you will see one more quarter of heavy loss (due to layoff and severance costs). The following quarter will be a lean company, selling enugh phones to make a profit, and possible having a social network north of 100 million users. The spring of next year the company will begin building of its profit, and you'll see growth instead of decline... BB is now a small tech company with big bills... once they pay the bills, thy will just be that small company with about 30 million customers. If they can grow the base, they will succeed. If not they fail.
The alteration of sales counting makes it difficult to know exactly how many devices there are in hands. This was necessary to report numbers as other companies do. (and should have been done from the start.) Next quarter the holiday season, + a full quarter of new method sales counting will show a more dramatic growth in sales numbers. It doesn't matter what the growth is, as long as it continues to go up. The reality is.... without shipping 1 million phones to a distributor in that first quarter... their sales figures would have been awful. They should have taken the hit then, instead of now. They could have had a summer of positive spin by increasing sales, rather than it looking like it died AFTER the launch.

[Wiki Cydia]

They would, but just make the adjustment in the purchase price. In this case BlackBerry was being realistic and just did it themselves.

Keep in mind if they write them down one billion but end up selling them for five hundred million, the next earning report would show that as a five hundred million gain or in reality, a general ledger entry to reverse some of the write off, but effectively the same thing.

But if they adjust the price to reflect the loss without revealing why, shareholders would then wonder what was going on, and rightfully so. Remember, this isn't a business transaction between BBRY and Fairfax; it's between Fairfax and shareholders, with the BBRY BOD in between. There are disclosure rules after all.

[mikeo007]

Did they every actually explain exactly how they performed the inventory writedown on the Z10s?
Surely they didn't perform a total write off, just a reduction based on new expected revenue from the units.
I'm not sure how it works exactly though, and it seems nobody else really is either.

I always assumed (guessed) that say they wrote down 1/2 the value of Z10's (~$250) we're looking at a 50% reduction on about 4 million units, right?
So either we should expect to see Z10's at possibly a 50% discount, or another writedown in the future if the units still don't sell?

It doesn't seem like proper accounting to give something a value of $0, with the intention to still sell it above $0.
It seems much more reasonable to reduce the value of the inventory by the previous value, less the new amount you expect to move the inventory for.

In other words, I don't think they're sitting on 2 Million Z10's valued $0, I think they're sitting on 4 million Z10's valued at ~$250.

[amazinglygraceless]

The question I have, is did BlackBerry have to write off those Z10s now? They've only been on sale 6 months and you can generally expect AT LEAST a years worth of sales for a model, usually more.

It just seems...a bit deliberately sabotagey to write those phones off and incur that debt a few days before this takeover bid came.

Write DOWN - which is essentially restating / assigning a lower value to the inventory in question. Writing the inventory OFF would be restating the value as ZERO and that would have a massively different effect on this discussion and BlackBerry's fortunes.

I know to some this may seem like a matter of semantics but it isn't. A Write Down and a Write Off are completely different and have different, usually negative effects on a companies financial position.

[Thunderbuck]

Here it is.. The most half full view that's possible....

Without the write down, and without laying people off... the company is almost at the break even point. You have cross bbm around the corner, along with "channels" and bbm money lurking... Without altering the way they count phone sales (vs phones shipped), it would have shown an increase in sales of bb10 phones each quarter. The bb7 phones are dying, but everyone expected that. Now that the write down is in the past, and more layoffs are coming... you will see one more quarter of heavy loss (due to layoff and severance costs). The following quarter will be a lean company, selling enugh phones to make a profit, and possible having a social network north of 100 million users. The spring of next year the company will begin building of its profit, and you'll see growth instead of decline... BB is now a small tech company with big bills... once they pay the bills, thy will just be that small company with about 30 million customers. If they can grow the base, they will succeed. If not they fail.
The alteration of sales counting makes it difficult to know exactly how many devices there are in hands. This was necessary to report numbers as other companies do. (and should have been done from the start.) Next quarter the holiday season, + a full quarter of new method sales counting will show a more dramatic growth in sales numbers. It doesn't matter what the growth is, as long as it continues to go up. The reality is.... without shipping 1 million phones to a distributor in that first quarter... their sales figures would have been awful. They should have taken the hit then, instead of now. They could have had a summer of positive spin by increasing sales, rather than it looking like it died AFTER the launch.

There seems to be an effort to make things look as bad as possible here, and that makes me very suspicious. They didn't HAVE to take that write down this quarter (any potential buyer could have placed their own value on that inventory), and they didn't have to choose this quarter to change their method for reporting sales.

To me, the "real" news in this report is that Z10 sales in Q1 were horrible; likely less than a million. But BB10 sales overall were triple to quadruple that for Q2. Not going to pretend that's stellar, but it IS progress. Why would they go to such an effort to bury that in bad news?

[undone]

Write DOWN - which is essentially restating / assigning a lower value to the inventory in question. Writing the inventory OFF would be restating the value as ZERO and that would have a massively different effect on this discussion and BlackBerry's fortunes.

I know to some this may seem like a matter of semantics but it isn't. A Write Down and a Write Off are completely different and have different, usually negative effects on a companies financial position.

Right, so they can go back to the market with a repriced Z10 overstock to try to get rid of them (sell for cost) or even seed them with enterprise customers for cost or even below. Then in fact realize gains. Only time these accounting things matter is when its written off inventory they toss. My company writes down stuff on a schedule, just like all companies. Wonder if this schedule BB is now following more inline with standards.

[moosbb]

There seems to be an effort to make things look as bad as possible here, and that makes me very suspicious. They didn't HAVE to take that write down this quarter (any potential buyer could have placed their own value on that inventory), and they didn't have to choose this quarter to change their method for reporting sales.

To me, the "real" news in this report is that Z10 sales in Q1 were horrible; likely less than a million. But BB10 sales overall were triple to quadruple that for Q2. Not going to pretend that's stellar, but it IS progress. Why would they go to such an effort to bury that in bad news?

To finally buy share at low cost? (ie 9$ is totally low cost imho!)

[Cashgap]

Possibly a stupid question, but selling companies is not my thing.

If Thor has just announced that BlackBerry have $2.6 billion in cash and no debt, why go private?

The market puts a discount on the cash. BB is expected to have losses for the foreseeable future, so a portion of that cash will be gone by the time a buyer gains control. How much? Anyone's guess, but even if the Fairfax deal were genuine*, how much of the cash would be gone by the time they complete due diligence? Or by the time they gain control?

Second question, when Prem gets BlackBerry, what happens to that $2.6 billion?

The number will be lower by then, and the cash will fund operations until his plan (turnaround? resale? pivot? stay the course? breakup?) begins to generate cash.



*I see the Fairfax offer as an inexpensive way to attempt to put a $9 floor under the stock price. If the market believes the deal will happen at $9, the stock will not trade under $9 again.

ANYONE who believes the deal will happen at $9 in sixty days can buy the stock today at $8 and sell it at $9 in sixty days. That is not happening, because the market does not see a $9/60 deal as likely.

http://forums.crackberry.com/news-ru...t-ploy-854459/ explains it pretty well.

[MazoMark]

So glad to see someone finally define write down and write off correctly. The tech press almost all use write down and write off as if they are the same thing.

For those who wonder why BB took write down now, the simple answer is if they want to cut Z10 price below the book value, they have to inform shareholders of the write down as a publicly traded company. The channel is also probably putting pressure on them to do something to move inventory. I have no idea what kind of inventory protection BB gives the channel, but they could have been facing a massive return of Z10's from inventory stock if they didn't do something on price.

In future as a private company, there's going to be a lot less transparency on these kind of events.