10-03-13 11:03 AM
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  1. world traveler and former ceo's Avatar
    hopefully this will start a bidding process for the firm ... otherwise Faifax as just stolen bbry in this lowball offer.......
    09-24-13 02:15 AM
  2. CrackedBarry's Avatar
    hopefully this will start a bidding process for the firm ... otherwise Faifax as just stolen bbry in this lowball offer.......
    I believe this is the first time you and I agree on something.

    1.7 billion is peanuts for patents, MDM, QNX, etc etc.
    Heck, their buildings alone should bring in a pretty penny!
    09-24-13 02:28 AM
  3. md21's Avatar
    I really don't know why people have such a hard time understanding the way this works.

    Watsa cobbles together an "investment" group and get an initial read that the dough they need to do the deal can be placed and they get a range of what the price on the notes will be.

    On that basis they make an offer, subject to financing, and go trotting back to the Investment banks who have to do a dog and pony show to round up investors . Investors in high rate, essentially junk bonds. They certainly are not investment grade.

    The offering docs get drawn up and the offer goes out to current shareholders.

    by the time the deal is finalized they will have taken on approximately $5Billion in debt, at junk bond rates, and incurred costs to the lawyers and accountants of in or around $3 million.

    The Investment banks get a share of the $5 Billion too don't forget. So Watsa and his crew end up with around $4.25 Billion after all is said and done and now they have to do something with it. The first problem they have is that BB is losing money and that first interest payment on the notes is 30 days away, and then every 30 days after that. And BB is losing money.

    New handset development, or OS or software development or grand marketing schemes are not on the drawing board. There isn't enough money to pay for those and there's $5 billion dollars to pay back to hungry banks.

    The layoffs will start again and the company starts getting broken up into marketable segments and put on the market.

    Within 18 months what you all think of as Blackberry will no longer exist. Period.

    It's a simple formula that gets repeated 100's of time a year and the final outcome is usually pretty much predictable from the outset.

    And no, this isn't the best outcome for BB.
    The Enterprise Value on this transaction is ~ $2.1 billion (Offer price for equity + net cash) and then taking out Prem's ~ $500 million of equity consideration, you have approximately $1.6 billion of transaction value that will be financed via some combination of debt and equity.

    BlackBerry has LTM EBITDA (proxy for free cash flow) of around $1.3 billion, so even if you finance the total remaining consideration completely with debt, you're looking at only slightly above one turn of Free Cash Flow - hardly a large amount of leverage.

    I don't envision them running to sell critical pieces of the business off, as I think given the purchase price, they'll have a much more robust IRR given the free cash flow generation and subsequent debt paydown that they can accomplish by running BlackBerry as a services oriented business. Once, they've established a much leaner, profitable business, there will surely be suiters looking to purchase the company, given its expertise, patents, and technological know how, which is likely Fairfax's monetization strategy.

    Posted via CB10
    cman5 likes this.
    09-24-13 02:58 AM
  4. texazzpete's Avatar
    Watsa releases a press statement saying they will FOCUS on enterprise and people still think the consumer devices section will be saved?!

    LMAO!

    Another thing that has now seemingly died is all talk about 'mobile computing'. Thorsten Heins favorite selling point that turned out to be a meaningless mantra.
    09-24-13 03:17 AM
  5. Superfly_FR's Avatar
    Superfly_FR is a true believer. I don't think he's ever pretended to be anything else. I'll give him credit that he always cautions others into following his ideas.

    He should have added a caution to this thread. You must, above all else, remember the PW is spending other folks money. He has someone to answer to, besides Mrs. Watsa.

    Finally, Bringing back Mike L. is a monumentally bad idea. Sure, Mike L. had the great idea that started RIMM, but what has he done lately, other than drag the company down?
    Watsa releases a press statement saying they will FOCUS on enterprise and people still think the consumer devices section will be saved?!
    True believer I am, indeed !
    Regarding Mike, he clearly failed to address the consumers market. But created and succeeded in the enterprise "vision".

    I believe main BB error has been to loose (2 "o" is intentional here !) their DNA when consumers adoption was accidental, and only due to BBM (the multi platform BBM may be the breadcrumb to keep a name in consumers space, btw).
    Basically, I believe BlackBerry is back to roots and in a position they can steal the enterprise market.
    AND I do believe they will not be able to do so without one or several equity partners, mostly to provide reasurance about the company future (and some cash, but it's not that important).

    For a few months, I've been talking about the way you can "slice the company". When most were slicing the cake in hardware, software and network, I for one was claiming they could slice it regarding users, i.e consumers V.S Enterprises markets. This is what is happening right now.

    Mike and Prem have 15% of BlackBerry in their pockets. Both are involved in the company for years and have proven support and faith (Watsda could have sold when stock hit $18). They also have the address book many would kill for. Mike back on the board will be a very good sign, as in "ok, now we reset our priorities single priority: enterprises needs. Kids, hype-rs and gamers are hypnotised by brand love, we'll see that later, eventually". And BlackBerry mantra is simple : bottom up security. You cannot guarantee security if you break this rule : they won't quit the hardware; they just can't. (Looking in the mirror, I believe BIS abandon was a very bad strategic choice - while I kinda blessed it when announced, I must admit).

    I'm pretty sure there is already at least one deal with an equity partner (whether or not involved in the capitalistic bid - it can take numerous forms) but it won't be advertized now, because it'll raise instantly the stock value. Due to personnal reflexion and readings, I have a short list of N.A or European companies that may fit perfectly. For the hardware: IBM (servers), CISCO (infrastructure). For the software (and NOC): my MSFT take is more than ever valid IMHO (but is based on a contrarian reading of BB/MSFT history, so may sound like pure fantasy). For software and services, I believe SAP would be a wonderful partner.

    In a "news powered" world, current considerations about security/privacy will influence enterprises and - so-called - prosumers. BlackBerry has been labeled cheesy because of their obsession about security. Should the NSA story have leaked 2 years ago ... and they may been in a totally different situation right now ... provided they did not "forget" to promote it, against all odds. Sadly they went the "cool" way, presuming it'll stand glued to the brand like a halo. And they compromised it in the customer market (BIS, again).

    I'm excited they remember where they were indusputed leaders, are still the only reference to compare with and still have this halo. I can understand many here will be upset, because they won't be targetted nor adressed as priority users and Netflix or instagram may not come fast. Yet they will still be able to buy the devices, use faeatures against apps and sideload whatever they will find convenient ( Android "runtime" is improving fast, very fast). I'm a developer and will re-target my devs accordingly; while it's sexier to develop games, it's not a hobby it's the way I earn money.

    Stop throwing stones. Could it be better ? Probably. Could it be worse ? Certainly.
    I ask for a two years observation until we can look in the mirror and compare to actual competitors (I mean with the same size, not the giants).
    Then I'l write a book about it, maybe.


    Damm ... sorry, I went OT a lot ... fan enthusiasm, probably
    Last edited by Superfly_FR; 09-24-13 at 04:44 AM.
    jxnb, m1a1mg, badiyee and 1 others like this.
    09-24-13 04:12 AM
  6. world traveler and former ceo's Avatar
    lets hope better offers come forward in the days and weeks ahead ... this is as lowball an offer as one could imagine!
    09-24-13 04:43 AM
  7. Superfly_FR's Avatar
    lets hope better offers come forward in the days and weeks ahead ... this is as lowball an offer as one could imagine!
    You play poker ?
    Wait for the turn.
    09-24-13 04:46 AM
  8. notfanboy's Avatar
    You play poker ?
    Wait for the turn.
    First you have the flop, then the turn, then the river.

    Friday was flop day with the pre-announcement numbers showing that BB10 was a commercial failure.

    Then Monday came when the offer was revealed to turn the company private.

    Later when the deals are finalized are when the shareholders are finally sold down the river.
    09-24-13 05:07 AM
  9. Superfly_FR's Avatar
    First you have the flop, then the turn, then the river.

    Friday was flop day with the pre-announcement numbers showing that BB10 was a commercial failure.

    Then Monday came when the offer was revealed to turn the company private.

    Later when the deals are finalized are when the shareholders are finally sold down the river.
    (Poker advice) No matter the cards. It's about how you use it ...
    09-24-13 05:39 AM
  10. notfanboy's Avatar
    (Poker advice) No matter the cards. It's about how you use it ...
    I like this one: “If you can’t spot the sucker in the first half hour at the table, then you are the sucker.”
    Last edited by notfanboy; 09-24-13 at 05:56 AM.
    mikeo007 and Etios like this.
    09-24-13 05:44 AM
  11. Superfly_FR's Avatar
    I like this one: “If you can’t spot the sucker in the first half hour at the table, then you are the sucker.”
    Take apart the two chip leaders. Who's at the table ? Who's the sucker as of date ? Did I ear NOK ?
    09-24-13 05:46 AM
  12. outoftheice's Avatar
    I'll be the first to admit that my knowledge of the business sector isn't the strongest but for those who seem convinced that Watsa wants nothing more than to break up BlackBerry for a quick profit I offer up the following quotes from a Globe and Mail interview with Mr. Watsa yesterday. Now granted, anything said now must be taken with a bit of a grain of salt but from what I've read about Fairfax and Mr. Watsa, all signs point to BlackBerry being kept together to realize a return on investment instead of being hacked up and sold in pieces for a quick buck...

    Watsa surprises again by riding to BlackBerry's rescue
    TARA PERKINS AND JACQUELINE NELSON
    The Globe and Mail - Watsa surprises again by riding to BlackBerry's rescue - The Globe and Mail

    Were trying to make sure it remains in whole, in Canada, Mr. Watsa said in an interview Monday after unveiling the proposed deal.

    But there is more than patriotism at play. Mr. Watsa gained his standing as one of Bay Streets sharpest minds with savvy investments over a long period of time. From 1985 through 2012, Fairfax earned annual returns of 19 per cent for its shareholders. Mr. Watsa rarely makes a move unless he believes the numbers add up.
    But Mr. Watsa is also hoping that by taking the company off the stock market, he will be able to give BlackBerry CEO Thorsten Heins and his executives the breathing room they need to make long-term strategic decisions.

    BlackBerry has fallen on hard times recently, but we have every confidence it will be successful again, Mr. Watsa said. His strategy includes focusing on the corporate market, where it has had more success retaining customers, rather than on the consumer market a path BlackBerry said last week it is going to take.
    Mr. Watsa counts former BlackBerry CEO and co-founder Mike Lazaridis as a friend, and has strong ties to the University of Waterloo, where BlackBerrys headquarters are located.
    cman5 likes this.
    09-24-13 05:55 AM
  13. notfanboy's Avatar
    PS: the "you" below is not you, SuperFly. Its just used as a general pronoun to represent the individual investor.

    Example: Let's say at a poker game, you see around the table hedge funds, institutional investors, Prem, and yourself. You settle down for a long night of gambling. You win a few small early hands. But then you start losing. And losing. But you tell yourself that you have a system. You're smarter than the rest of these guys, you worked out a system complete with some fancy charts. You lose some more. You suspect someone is cheating, maybe a card mechanic. Otherwise the system would have worked! So you stay at the table, hoping for the big payday that will make up for all the other losses, hoping for the 4 card to show up to complete your 2-3-5-6.
    09-24-13 05:56 AM
  14. CrackedBarry's Avatar
    Of course he said he "wants to try"...

    Phrasing it that way means that it won't technically be a lie, when he splits up the company.
    He tried after all! Just not very hard...
    09-24-13 06:17 AM
  15. Bluenoser63's Avatar
    "delivering superior and secure enterprise solutions"

    This tells me BB10 and consumers are gone.
    This tells me that BB10 is going to be a big part of the enterprise solutions.
    09-24-13 06:33 AM
  16. Bluenoser63's Avatar
    People on this forum keep getting stuck at the denial stage of grief.

    Handsets are dead... gonzo... finished... 86'ed, etc.

    Blackberry CANNOT compete with the big boys and if you think their name was mud before, it's even worse now.
    Who's going to want to buy a Blackberry phone now after all this turmoil? People didn't want to buy them even when they were on their comeback trail.

    The Blackberry you all know is gone. There will be no consumer market - their last attempt will be putting all their eggs in the enterprise software basket.
    You cannot have an enterprise solution without an enterprise handset.
    Superfly_FR likes this.
    09-24-13 06:36 AM
  17. Bluenoser63's Avatar
    I really don't know why people have such a hard time understanding the way this works.

    Watsa cobbles together an "investment" group and get an initial read that the dough they need to do the deal can be placed and they get a range of what the price on the notes will be.

    On that basis they make an offer, subject to financing, and go trotting back to the Investment banks who have to do a dog and pony show to round up investors . Investors in high rate, essentially junk bonds. They certainly are not investment grade.

    The offering docs get drawn up and the offer goes out to current shareholders.

    by the time the deal is finalized they will have taken on approximately $5Billion in debt, at junk bond rates, and incurred costs to the lawyers and accountants of in or around $3 million.

    The Investment banks get a share of the $5 Billion too don't forget. So Watsa and his crew end up with around $4.25 Billion after all is said and done and now they have to do something with it. The first problem they have is that BB is losing money and that first interest payment on the notes is 30 days away, and then every 30 days after that. And BB is losing money.

    New handset development, or OS or software development or grand marketing schemes are not on the drawing board. There isn't enough money to pay for those and there's $5 billion dollars to pay back to hungry banks.

    The layoffs will start again and the company starts getting broken up into marketable segments and put on the market.

    Within 18 months what you all think of as Blackberry will no longer exist. Period.

    It's a simple formula that gets repeated 100's of time a year and the final outcome is usually pretty much predictable from the outset.

    And no, this isn't the best outcome for BB.
    You and other "analysts" don't even know how all the pieces fit together and they are inseparable. What do they have as pieces? MDM software: Relies on the NOC and BB10 phones to get a full enterprise solution. BBM: Relies on the NOC. NOC: You need elements to run on the NOC or else it is worthless.

    So what do that have left: Cash and Patents. I have seen number between 4.25 and 7 billion as the value of these two. Cash being 3 billion, but if you dismantle the parts, you will have to burn all the cash in clearing liabilities ie severance, etc. So all you have is patents. 1.25 to 3 billion. So if you paid 5 billion to sell worthless parts for an crap shoot on patents, you lost money. Prem is smarter than that.
    09-24-13 06:46 AM
  18. dr0800's Avatar
    That's precisely right. For BlackBerry to compete as a niche operator they require an integrated handset, os and enterprise system.
    This buyout reminds me of the famous line in De Lapidusa's novel the Leopard; " for things to stay the same everything must change". Watsa knows that.
    09-24-13 06:49 AM
  19. Bluenoser63's Avatar
    As a developer, you are absolutely 100% mistaken if you think the Jelly Bean news will make any difference. All the announcements to date from BB are a clear and direct signal they have no interest in participating in the consumer market and this is an immediate "drop tools - cease work" for that small handful of developers that were even interested in BB10 in the first place.
    I think you are short sighted. As an enterprise developer, I look forward to developing enterprise solutions for our company using BB10 SDKs and BB10 phones. Most of my applications were only going to be there anyway. If I was still running my own software company, I would be licking my chops with the possibility of developing enterprise Blackberry apps for businesses and supplying then with Blackberry Enterprise services.
    pcguy514 likes this.
    09-24-13 06:51 AM
  20. mikeo007's Avatar
    I think you are short sighted. As an enterprise developer, I look forward to developing enterprise solutions for our company using BB10 SDKs and BB10 phones. Most of my applications were only going to be there anyway. If I was still running my own software company, I would be licking my chops with the possibility of developing enterprise Blackberry apps for businesses and supplying then with Blackberry Enterprise services.
    You vastly overestimate the enterprise app market. Unless you're alluding to the fact that future apps will be built (and rolled-out) in-house, which I agree with. Regardless, the poster you quoted was (i believe) implying that BB World will become even more of a ghost town than it currently is, and I 100% agree with him.
    09-24-13 07:08 AM
  21. texazzpete's Avatar
    You cannot have an enterprise solution without an enterprise handset.
    Good thing that 95% of the people on CrackBerry have no interest in an 'enterprise handset', eh?

    Retreat from the consumer space and there's no going back once app development dries up. Plus your big brand name loses value with consumers...
    sexybabe88, Etios and kevinnugent like this.
    09-24-13 07:20 AM
  22. sleepngbear's Avatar
    It's fair to be skeptical at this point. I don't agree with this assessment, though. For one thing, I'd bet that Mike L. WILL be coming back in the course of this deal (and I think they're avoiding mention of him right now due to the optics of returning the "old guard" back to leadership). I have trouble believing that Mike L would return just for the sake of dismantling his own baby.

    There's a way forward for BlackBerry. Fire-sale Z10s will broaden the userbase quickly, and the Jelly Bean runtime makes porting Android apps a much more attractive proposition for major publishers. By the end of the year this could be looking a lot brighter, WITHOUT meaning the dismantling of the company.
    So far I've only seen mention of Mike L returning as a rumor. But this would make me feel a whole lot better about the future of BB and the sincerity of Watsa's statements. My sentiments toward Heins have taken a complete 180 the last few days; I never thought I'd hear myself say this, but right now I'd welcome Mike back with open arms, and maybe even a big kiss on the cheek.
    09-24-13 07:23 AM
  23. Superfly_FR's Avatar
    PS: the "you" below is not you, SuperFly. Its just used as a general pronoun to represent the individual investor.

    Example: Let's say at a poker game, you see around the table hedge funds, institutional investors, Prem, and yourself. You settle down for a long night of gambling. You win a few small early hands. But then you start losing. And losing. But you tell yourself that you have a system. You're smarter than the rest of these guys, you worked out a system complete with some fancy charts. You lose some more. You suspect someone is cheating, maybe a card mechanic. Otherwise the system would have worked! So you stay at the table, hoping for the big payday that will make up for all the other losses, hoping for the 4 card to show up to complete your 2-3-5-6.
    That would be an error.
    Let's make it clear; the sales revealed in the warning were far from "our" predictions, even conservatives.
    Given this new fact, BB strategy has to adapt. So did "our" perception and analysis.
    I'm not waiting for the 4 to pop at the river ... to say the truth I believe they have two pairs on the table: Queens and Fours, witch can be enough to steal the pot with a good bet strategy.
    Remember, it's not only a cards face value game, bids order and value matters, and Watsda is at the button, after other's "check".

    ... Now if the 4 (equity partner) drops at the river, this would be the all in.

    Last edited by Superfly_FR; 09-24-13 at 07:44 AM.
    09-24-13 07:33 AM
  24. m1a1mg's Avatar
    I think it's important to distinguish between business and emotion.

    1. There is no guarantee that another offer will come in. None. There are many "experts" that think this offer was too high, given the companies future.

    2. Mike L. coming back is a pure emotional move. Mike L. was the founding father of the technology. That doesn't mean he has a clue business wise. In fact. one could easily argue for the alternative. How many of you were happy when he left? What has changed?

    3. Enterprise needs to come back in force to make this work.

    4. Given cash on hand, it looks like a tremendous deal. But don't forget that BBRY has ~$5B in commitments to build phones that they can't sell.
    09-24-13 07:43 AM
  25. KenFletch's Avatar
    consider

    1. they already own 10% , or is it 28% , if Laz joins they don't have to buy his , and they don't have to buy from any other big current invester who joins them.

    2. with 2.6B in the bank and other assets , it won't be junk bonds financing it. The assets will cover any loan , no probs.

    3. the 2.6 B could pay part of the loan OR can pay interest for a very long time.

    4. it may not be financed by debt at all but other investment groups/firm actually buying shares in the private firm or some combo of debt and non-debt financing. We don't know and it's there business/problem ... which is the big benefit, gets it all out of the stock market histrionics.

    5. the sooner the better as BES adoption will be on hold until this is done
    09-24-13 07:45 AM
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