Originally Posted by
Sairos No company shoots itself in a certain segment. They brought him to turn the company around because he succeeded in doing that in Sybase. He just wasn't a hardware guy but a software guy. They thought the problem is with the software (BB10) and maybe he can solve it, which will result in turning the hardware around. Because certainly the problem was in BB10, not bad devices or anything. He wasn't going to design the irresistible phone that makes people forget Apps.
They should've split the hardware division and handed it out to someone else like it's done now. Someone with experience in handsets. The fact they did so now shows you they've realized Chen is a big 0 in hardware.
Why? Its more attractive as an acquisition target when its losing. They can buy it for less $ per share this way. After they complete the acquisition they would shutdown the unprofitable hardware division and it will now longer weigh down on the company. As a result the stock will gain in the following months, as software revenues increase too. Companies always search for other under-performing & undervalued companies to acquire them. A Losing company is appealing if it has what it takes to be profitable. BB has that, you just have to kill the hardware.
The value of the company is seriously undervalued due to everyone identifying BlackBerry as a smartphone manufacturer. (This is why its appealing to buy it with a losing HW division). They can't see beyond that. When he shutdowns the hardware, not only he stops the money draining but he allows people to see the company as its true self, setting the stock to reach its true value.
When the Priv was released, the stock gained substantially in the following months after the initial hype. When people realized it wasn't selling, Well, selling times started and it went back to its pre-priv price. So they cut the hardware loose, scream & shout we're a software company like its propaganda, in order to allow people to see the true value.