BlackBerry starts “Exploration of Strategic Alternatives,” including a sale

Ian Hardy

August 12, 2013 8:13 am

Looks like the rumours from last week were true about BlackBerry potentially going up for sale. The company has announced this morning that the Board of Directors have created a ‘Special Committee’ to “explore strategic alternatives” that could include ‘possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions.”

According to the press release the Special Committee will be chaired by Timothy Dattels, plus include Barbara Stymiest, Thorsten Heins, Richard Lynch and Bert Nordberg. Leading the “Exploration of Strategic Alternatives” process will be JP Morgan Securities as its financial advisor, Skadden, Arps, Slate, Meagher & Flom LLP and Torys LLP are serving legal advisors.

Timothy Dattels, Chairman of BlackBerry’s Special Committee of the Board, stated “Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives.”

Thorsten Heins, President and Chief Executive Officer of BlackBerry, added, “We continue to see compelling long-term opportunities for BlackBerry 10, we have exceptional technology that customers are embracing, we have a strong balance sheet and we are pleased with the progress that has been made in our transition. As the Special Committee focuses on exploring alternatives, we will be continuing with our strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10, as well as driving adoption of BlackBerry 10 smartphones, launching the multi-platform BBM social messaging service, and pursuing mobile computing opportunities by leveraging the secure and reliable BlackBerry Global Data Network.”

Last quarter BlackBerry reported 6.8 million smartphone shipments and revenues of $3.1 billion. BlackBerry also noted that “there can be no assurance that this exploration process will result in any transaction.”

Source: MarketWire

  • Tony Sarju

    Finally. Should have done this a long time ago.

  • Striker67

    Exploring strategic alternatives puts doubt in the future of the company. Just what they need going forward with a transition. This company is starting to shoot itself in the foot again. I was seriously considering their 5 inch device when it came out. Now I think I will hold off to see where this strategic alternative may take it before making any decisions.

    • Stephen_81

      I wouldn’t worry, “strategic alternatives” is investor speak for, we are going to perform our fiduciary responsibility, but all steam ahead on our current trajectory.

      if a Company is seriously looking at strategic alternatives they don’t announce it because just announcing it lowers your bargaining power.

    • iPlunks

      How did you get all of that from that statement they made?

    • Stephen_81

      Because it happens with 100′s of companies.
      And because basic negotiation you don’t show your hand and act desperate if you are looking to actually merge with someone.

    • Mythos88

      Actually it is acknowledgement that they know their business model is not sustainable. No company announces this if they think they can survive on their own. BB will be bought for about a billion or so for their patents.

    • Stephen_81

      Company has more cash value than 1 Billion, there is no way it will be selling for $4/share

      The most likely thing to happen is they go private which this announcement could lead to, not so much a sale of the company.

  • Tyrone Thomas

    Smh…. Strategic alternatives = they have no clue what they are doing.

    • robert_

      Do you need a dictionary?

    • Tyrone Thomas

      I think you’ve been sleeping for the past five years if you can’t read between the lines.

    • Supa_Fly

      ^ and you’d know exactly how to run a company? They’ve already had JP Morgan at the helm 2yrs ago.

      That said … throwing in the Z10 for sale today (FIRE SALE for SUCKERS). Yeah I was a sucker but not born a minute; I learn from mistakes.

      Comments that concern me:

      “we have a strong balance sheet” =/ if this was true you wouldn’t need to fire 7000 employees Mr. CEO.

      “we are pleased with the progress that has been made in our transition” WTF?! If you’re pleased at these BB10 lack luster sales … then who am I fooling trying to show what this phone can do? Who am I to put faith in the company that CLEARLY has no ambition!!!

      Selling my Z10 for $300CAN OBO. iPhone 5 I’m coming back.

      Maybe in 7mths we’ll have the benefits of what BB10 can do (or even the UI elements for gestures) trickle into iOS and Android.

    • hoo dat

      I would hardly call JP Morgan being “at the helm”, they were hired to research several options which they’ve now done and will now be advising the committee what their findings are. They’ll also provide scenarios based on options that will be presented to them as the process continues. At no point was JPM’s remit been to set the company up to sell.

      BlackBerry has $3B in cash and investments, a market capitilisation of $5.8B, $3B in intellectual property, enterprise services of between $4.3B-$5.7B, income and assets from QNX and TAT and other subsidiaries $?, and no debt. Yeah, I’d say that was a healthy balance sheet, wouldn’t you?

      As to sales, I guess we’ll have to wait and see but it`s so pointless getting PO’d over a device. Personally, I’ve got more important things to worry about.

  • iphoneee’s bro

    This is legitimately sad to hear. I may be iPhone’s bro but BlackBerry is like my dad.

  • Rich

    As an investor, yahoo!

    • Supa_Fly

      If you’re a stock broker shorting then yahoo … as a typical investor you’re loosing cash by the minute.

    • JTon

      Shares will typically be sold at premium to what they are currently trading at. That’s why investors jumped on the stock this morning. It’s an easy way to make a quick buck.

  • thatcrazyone

    Sad to see it get to this point, but they have only to look in the mirror for blame :(

    • Tyrone Thomas

      Amen to that! They’ve been way to overconfident for too long and now even after going through Android’s back door just to boost their app count they still can’t make a competitive product. Serves them right if you ask me.

  • kroms

    How can people NOT SEE that BB is not doing well ?

    It amazes me on the denial of people and how far they are willing to go simply because they refuse to believe or will not except the reality that BB is not selling !!
    Hate me all you want but let’s be serious here, just venturing out doors is enough to give you a BOG dose of the truth. The only time i see a BB phone in someones hand is when it is one of the OLD models they simply have had for years now.

    This is NOT going to help or save BB. Sorry but we must be real.

  • southerndinner

    LOL told you all

    RIP BBRY

  • erere

    RIP BB

  • Balls O’Steele

    Why would anyone want to buy this failed company?

    • southerndinner

      Maybe someone who likes failures and garbage

    • J-Ro

      If they can fail and still have over 3 billion in cash, imagine what success looks like.

  • somedoobsandbeer

    Bubye now, tcfkar. Bubye.

  • hoo dat

    Going private would be a Godsend for BlackBerry, what has been one of their weak points to date has been their major shareholders, with the exception of Fairfax, dulling the progress. Going private will enable the decision process to be smoother and much quicker, and most importantly enable management to take much bigger risks than before.

    • kroms

      I don’t see going private as an option or that it make BB more profitable.
      I think this is wishful thinking.
      When was the last time a tech Company went private and is making more money then they know what to do with ?

    • J-Ro

      Twitter is a private company and are clearly making great profit.

    • kroms

      Twitter make phones ? I seriously doubt twitter would be making profit if they had the expenses that BB has. Big difference between the 2. Twitter is what ? 11 million ?

      BB – 3-4 Billion ? huge difference in Op Costs and products

    • J-Ro

      You said Tech company, not Hardware/Software manufacture.

      And it doesn’t matter if anyone did it before them, they could be the first to do it and still do very well.

    • hoo dat

      We’re not talking world domination here, we’re talking about BB getting back on their feet, they can always go back to being a public company when it’s needed. Until then they need to foster an environment that encourages, efficiency and risk taking. Going private is not only feasible, it’s entirely possible and some say probable. Watch for Prem Watsa and Fairfax, there’s something brewing there I’m sure.

    • J-Ro

      I think that is exactly what they need. I have been using the Q10 for a few weeks now and there is nothing wrong with the phone. The have a lot of work to do but it is a brand new OS, after all.

      I think going private will also get the figures out of the consumers head. People assume because they didn’t sell well that they are horrible, which has nothing to do with the actual performance of the device.

      So, here is hoping they go private, sooner than later.

    • kroms

      The problem with BB and Q10 ……….. future buyers like the kids growing up today do not want a Q10. They are not selling TODAY !

      They certainly will NOT sell more in the future.

      Sorry but technology has moved on . I’m glad you like the keyboard but it is not relevant on smartphones anymore. Just simply not needed.

    • J-Ro

      Which is why they need to focus on their core business, businesses. I agree that most people love having fun with their phones and a BB is more of a tool.

      Just like in the past, if they focus on corporate consumer growth, regular consumers will get them out of the “jones” effect.

      A all touch might be cool but if you have the same phone as the big business person that makes millions, you feel important and that will be their selling factor.

      They just need to get back into all the businesses and governments and then wait till the rest catch on.

      P.S. The z10 and z30 will be for the people that want more pleasure than business, so there will be options for everyone.

    • kroms

      I agree with what you say but I don’t see BB problems as does it have a Qwerty KB or not. The problem is / was It no longer has anything in the way of NEW or something that wold drive people to the device. People ( BB users ) Mock Android all the time but then forget that BB is using Android ( apps ) as part of it’s strategy to have apps on it’s phone , that to me is just absurd and plain silly.

      Ive had BB way way back, I then moved to Iphone. When Android was released I tried and loved the way it allowed FREEDOM to use the phone as I wanted by not locking me down or tying me to Itunes like Apple does. BB needed to make a phone with a more Creative and user powerful OS . Not make it more like WinPhone or Apple.
      Put the Experience in the hands of the People/Developers and you’ll see a shift in the way BB is received
      Also , all the BS about BB is more secure is just plain Cr@p.
      Unless people think that GOV and there ( NSA programs ) will favor BB over every other platform out there and allow it to operate anonymously then you can forget privacy on BB or any other platform. There is no such thing as total privacy anymore, people need to understand and get used to it.

    • J-Ro

      I agree. Part of why I think they are on the right track is because of the side loading. They understand that developers, no matter how amazing the OS is or will be, won’t flock if there is no incentive. So to make a compromise until that day comes, is great for consumers.

      All that is missing that people really seem to want, is Instagram.

      As for privacy. There is a better amount of security using BBM versus any other free platform. But if you plan on saying or doing something that would alert the NSA and other groups to take action on you, you’ll likely never be safe no matter what you use.

    • Stephen_81

      something you and I can agree on!

      Going Private will allow BlackBerry to spend the money that is needed to grow BlackBerry 10, BlackBerry couldn’t dump money into major developers hands like Microsoft has done because BlackBerrys balance sheet was always under scrutiny. They had to maintain a large cash position to maintain shareholder value every quarter.

      Going private means they can address long term growth needs without worrying about how the market will react to a drop in cash.

  • JB

    Its pretty obvious Perm Watsa is going to buy the company…..he left the board for conflict of interest which means he’s going to make an offer. anyways cheers.

    • Balls O’Steele

      He already owns a big share of the company. The question is will he buy more?

    • JB

      Yes of course…buy the company, and then take it private.

  • Toron James

    Should have gone with WP.

    • kroms

      WP?

      Working in IT Ive had the opportunity try and test all the different phones and there OS’s. Google’s Android is by far the most capable of all , simply because of it’s open standard. Apps like “APP OP’s ” are proof of it.

  • MXH070

    Shares up 12% so far today.

  • sting

    I wish consumers really knew about cell phones then bb would always win! Sad really.

    • kroms

      Really ? How so.

      Ive heard Apple, Android Makers ,MS/Nokia , and everyone else say exactly the same thing about there chosen platform.

    • sting

      I do understand what your saying. My point is that many seem to pick a phone based on peer pressures, best deals, looks, most game apps or whatever. My point was that if people were more informed about cell phones then BB would always win.

      I don’t say this to start a flaming war, just expressing my personal view. I realize other consumers get to choose how they spend their money, I wouldn’t want it any other way.

  • PT

    What about the Hockey team? LOL!

  • kroms

    The BIG problem and most Important problem for BB is the same for every other Phone Maker. All of them.

    I’m happy with what I have now.

    ” Why should I switch to ……………………………… ” Add any maker or OS you want.

    THAT is the problem.
    BB assumed that people would drop there existing phone to go with a BB device because ? It does not help the matter when your asking people to leave behind all there APPS and use a new ecosystem where there is less and or not even the same APPS on it. I don’t know.
    These CEO’s really need to wrap there head around the fact that you are catering to a mass population of people that that want more not less for what they pay for.

  • Kenny G

    Google should buy them out. That would help Google become a North American company and not just a US based company. Now that would be “Money”. ;-)