BlackBerry CEO Thorsten Heins to depart, Fairfax deal dies, company will raise $1 billion to save itself (Update)

Ian Hardy

November 4, 2013 8:26 am

Shocking revelation today about BlackBerry.

According to a report in the Globe and Mail this morning, Thorsten Heins, President & CEO of BlackBerry, has been let go and will be replaced. The company is also making some sweeping changes to its executive team and board makeup, though nothing has specifically been announced.

The move comes after the $4.7 billion buyout deal from Fairfax Financial Holdings, the company’s biggest single shareholder, reportedly died over the weekend, as the consortium could not raise the necessary funds to go through with the transaction. Instead, BlackBerry will attempt to raise $1 billion by selling convertible bonds that can later be turned into shares. This round of investment includes Fairfax Financial, who will “invest in BlackBerry through a U.S. $1 billion private placement of convertible debentures. Fairfax has agreed to acquire U.S. $250 million principal amount of the Debentures. The transaction is expected to be completed within the next two weeks,” according to a press release issued this morning.

The bonds will be turned into BlackBerry shares at a price of $10/share, which is a huge premium over the current stock price (especially today, as the stock is down 20% in early trading to $7.50).

When the deal closes, John S. Chen will become BlackBerry’s new interim CEO and Executive Chair of BlackBerry’s Board of Directors. He was CEO of Sybase until early this year, and stood on the board of directors for Wells Fargo and Disney. He was also an advisor to Silver Lake, an investment firm. Prem Watsa, Fairfax CEO, will become Lead Director and Chair of the Compensation, Nomination and Governance Committee.

While Heins is leaving the company as CEO, Chen will only serve as interim CEO while the hunt continues for a new leader. Barbara Stymiest will say on as BlackBerry’s Chair.


Update: According to an SEC filing, Fairfax’s partners in the $1 billion debt deal include Mackenzie Financial Corp., Brookfield Asset Management Inc., Markel Financial, Canso Investment Counsel Ltd. and Qatar Holding LLC.

  • southerndinner

    LOL

    the end is even more near. Raise $1 billion how? Selling phones? No one wants BB10 LOL

    • Skbwolf

      Someone is giving them the 1 billion via convertible notes

    • Me Ted

      I don’t think you should be laughing. Thousands of people are losing their livelihoods while this company continues to flounder. People who have put in years of hard work and dedication with no results due to terrible leadership. These are fellow Canadians as well so show a little respect.

    • framing god

      Put your money where your mouth is. BlackBerry is bleeding bad and is close to death. Who cares about the jobs. I have jobs I can’t fill that pay just as much or better than IT. Whoever gives them a billion is crazy IMO.

    • Skbwolf

      Its been a sham from the start with the prem deal. they had no reason to mark down the phones until after Christmas. someone on that board got their senses back when they realize 4.7 was a steal, but damage been done putting it up for sale. 2.66 Billion in cash, 500 million coming in cash from tax refund and another 250 mill from r&d refund. then have a 450 million savings from the 40% cut. the whole thing smells, almost nortel like. lol

    • iPlunks

      Can you say that again? Seems ppl forgot how these Canadians lost there jobs to begin with

    • Me Ted

      Our household has 3 Blackberry devices so shut it.

      “BlackBerry is bleeding bad and is close to death.”
      Holy facking captain obvious. Next.

      “Who cares about the jobs.”
      Are you serious? Wow.

      “I have jobs I can’t fill that pay just as much or better than IT.”
      I’m pretty sure they’ll find jobs in their respective fields but if not which Timmy’s do you run in case they’re interested?

    • southerndinner

      I’m sorry to your family, they probably would love to have a real cellular device instead of suffering because of your stubbornness.

    • Me Ted

      Two playbooks for nothing and a free phone for my wife. But that’s ok. You keep scrubbing those toilets. lol

    • DravenInc

      good…so you paid for them what they’re worth.

    • Me Ted

      Yawwwn.

    • egsfgfgdg

      must feel good to give things that nobody want to your family :(

    • Kamil Czerniak

      Your family is not representative to whole world.

    • Me Ted

      Thanks. Water’s wet too.

    • Kahn

      Don’t let the ignorant, entitled little kiddies get to you. People losing their jobs in our economy on that scale is not funny. Just because some phone dork doesn’t get it, it doesn’t change facts.

    • Me Ted

      Thank you. Someone who finally gets it.

    • egsfgfgdg

      i think its you two who doesnt get it. no one is laughing at people losing their jobs, they are laughing at blackberry who doesnt seem to have one bit of a clue what’s wrong with their business.

    • Kahn

      Aside from the genius who stated ‘Who cares about jobs?’, You’re also mocking his selection of phones and for supporting RIM which, by the way, is entirely up to him and not you. When I said ‘entitled little kiddies’ I was referring to the large sum of immature children who believe companies owe them something for free and who clearly demonstrate a complete lack of understanding how business works in the real world. RIM had bad/corrupt management yet so many people seem to want them to fail despite the fact that they’re a huge player in our Canadian economy.

      Please, continue to educate me on how we ‘don’t get it’. Wanker.

    • Surveillance

      The ones that still have their jobs best not be standing around and hoping they will be next. Dust off the resume and sharpen the skills!

    • Surveillance

      They WON’T be next rather.

    • Me Ted

      Oh I’m completely agree. It’s just a shame that they couldn’t continue to grow with the company.

    • Sam

      ofcourse its all management fault stupid people running this company and they getting $$$$$$$ and then the resign just like that

    • Tom

      Another sad thing is that despite Waterloo having many tech job openings at the moment, a lot of BB employees aren’t suited to fill them because those openings are for startups that desire hands-on skills, not bureaucratic methods.

    • kroms

      Respect ?
      LOL

      Corporations ( BB INCLUDED ) dont give a rats A$$ about employees. It’s all about the $$ . WAKE UP.

      Silly fools.

    • Me Ted

      My god is stronger. He is the everlasting sky! Your god lives underneath him.

    • Jehovah Witness

      55 MILL IN HIS POCKET.

    • egsfgfgdg

      woooo!! another billion so they can do another FAIL EXIT package to the next CEO that comes in and FAILS!

    • It’s Me

      learn. to. read.

    • rd0t

      Do you even bother to read the article? Do you even know how to read?

    • Sweet

      He never reads any of the BB articles. He’s just a troll. He just comes on to MobileSyrup, looks for BB articles and posts comments bashing BB. Don’t waste your time on him.

  • J-Ro

    What in the world? If Mike comes back, this would make sense.

  • IJustGotaTan

    I wouldn’t shed any tears, he’s made out like a bandit with all his bonuses.

  • Hugo Beaulieu

    OMG that sounds bad…. Seriously, who’s going to give them 1B$ with the current state of affairs? Their “go it alone BB10″ strategy is working sooooo well after all….

    Not sure the CEO is to blame, his departure only makes sense if they get a Superstar CEO to turn things around (think a Jack Welsh or Marissa Miller kind of figure…)

  • Striker67

    Wow…that I didn’t see coming

  • Striker67

    Maybe it was the fact that the current CEO has consistently placed a doubt over BB and as a result he had to go. The market share maybe declining but the new phones are good. They need to develop the ecosystem more and develop tools to make for an easy switch from android or apple. Just because the naysayers who haven’t even looked at the new offerings say they are garbage doesn’t mean they are.

    • framing god

      Why would I change from DROID to BlackBerry. I don’t see it happening anytime soon and once people leave blackberry they don’t go back.

    • slightlyleftofcentre

      I did. I’ve experimented twice with Android phones and went back both times.

    • Josh Brown

      What phones?

    • egsfgfgdg

      probably tried two chinese android knock offs

    • LeafsFanGirl

      Me too. I had several Samsung’s, a few Sony’s, Motorola’s and HTC and I always went back to my BlackBerry as my main device. I still have my Samsung S3, but it has a lot of issues. Hoping 4.3 will fix them. One thing that all my friends & family will agree about BlackBerry is, they have the best RF and call quality. Of all the phones I went through, they all said it doesn’t compare to my BlackBerry. Having said that, I love BlackBerry. But I also love Android and Apple, but I will never use them as my main device.

    • slightlyleftofcentre

      I’ve experimented with the HTC model, owned a galaxy S, and a Galaxy S2 Skyrocket with Jellybean. Definitely not knock offs.

    • Hugo Beaulieu

      They have decent phones, a decent/respectable (though not spectacular) OS. But they’ve done a miserable job at selling them. And though they’re not junk, they’re not particularly spectacular/remarkable compared to the competition either. That’s what they’re likely to keep struggling with.

  • Zee

    I love the picture they ran, it kinda looks like he’s saying “so long suckers!”

    • Skbwolf

      lolol

    • egsfgfgdg

      IM OUT BI*CHES!

  • iPlunks

    Dragging it out still??? They should be a software company. Their BB suites are top notch. Get out the hardware game.

  • selonmoi

    They’re done. This is tragic (though unsurprising).

    Some patent troll will probably pick them up for pennies in 6 months.

  • Tony Sarju

    Finally.

  • hyperhyper

    29 comments and no RIP RIM? For shame fellow Syrupers… for shame.

    Personally, I hope they can stabilize the company and focus on their strengths (time to let some dreams go RIM – it happens when you fall asleep at the wheel).

    • Ulysses Grant

      They weren’t really sleeping. Just two obnoxious arrogant CEOs running the company thinks they were on the top of the world. This is what you get when you are over your head….

  • HalfBlackCanadian

    As much as I don’t like knowing my neighbours are losing their jobs I think BB needs to let go and die (as a hardware company) and become a software focused group. Maybe this can be a big win for an ecosystem like Android where a unified security feature isn’t up to the competition’s level? Make BBM a Skype competitor? This is Palm all over again.

  • sicsicpuppy

    I guess there will be another round of layoffs soon .Sad to see people losing good paying jobs and often a whole local economy go down .This is Nortel all over again

  • Surveillance

    This company needs a marketing strategy and some commitment from app developers. Apples success is directly a result of both. Trust me.

    • Zed

      I don’t trust you, but I agree. Though I think it’s too late.

  • Paul Figueiredo

    Dude’s laughing his butt off all the way to the bank. Completely fails in every way. Leaves the company hanging over a cliff FAR worse than it was when he took it over, and he STILL walks away with a 22 million dollar pay-out.

    I wish I could fail like that.

    • unkown

      make that 55 million not 22

    • skullan

      55 was if the company was bought out and he was terminated.

      If the company wasn’t bought out and he was terminated it was 22.

    • Ulysses Grant

      Either way, 55 or 22 still better than the most of us here. LOL

  • Nahuel

    Come on BlackBerry!!! If you want to save yourself it’s simple… Better specs and Android!!!

    • Zed

      Of all platforms, it’s Android I love, but I’ll have to disagree with you. Android can’t and won’t save them either. Their platform is actually not bad, it’s just that they lost the popularity train about 3 years ago – that’s when BB10 should’ve been released with the phones to support it.

    • Tom

      Switching to Android is still a big risk that has a high chance of not paying off.

      BB does not have divisions selling laptops, TVs, washing machines, monitors, etc to sustain itself should the handset business not turn a profit. Just look at what’s going on with HTC right now. If you’re not Samsung, it’s difficult to compete in the high-end Android market, even if you have a genuinely better product (e.g. HTC One). LG and Sony also don’t see much presence.

    • rd0t

      This guy represents the average smartphone consumer, clueless.

    • Nahuel

      I work for Service Absolut (repair center), so I know must provably more than you ever will.

    • dr evil

      Don’t worry about rd0t. He’s just a bbry shill that lost his job and doesn’t know what else to do but whine like a little B. What ex bb employees SHOULD BE DOING is launching a class action against that reetard Heinz, making him forfeit his buyout and lose everything. Maybe even go to jail for 5-10 just for good measure.

    • rd0t

      All this butthurt.

    • rd0t

      What does that prove? What ‘better’ specs do you think BlackBerry needs? My Z30 runs just as fast as any quad-core Android powered device out there. Dont get me wrong, I love Android but it’s a resource hog.

      Oh, and string a proper sentence together first and then tell me you know more than me.

    • Nahuel

      Sorry, I realized that I made a mistake but I didn’t bother correcting it. Once again, I speak fluently 5 languages. I will be 6 feet underground before you can learn 3 of them hahahahaha. True story bro

    • rd0t

      All internet-tough guy stuff aside, you still didn’t answer my question. On what basis do you think BB10 devices are underpowered? How long have you used one for? Have you used one for more than a month?

    • Nahuel

      Yes, I used the Z10 when it came out back in February. My last BB before that was the BB9800, but after couple of issues with it I decided to give Android (the S2 at the time) a try. When the Z10 came out I was exited because being a previous blackberry user (my first was the 9000), I was like ”finally BB is back in the game”. The UI was fluid, there’s nothing to say there. But I quickly stared to have issues with it. From BBM not always showing my chats to random reboots in the middle of a call, and also experienced interlocking tiles… And of course the lack of APPs… And something I didn’t like, all the paid apps I had (from previous BB OS), I couldn’t transfer my licenses. So in May got the HTC One and I’m back on the Android side.

    • rd0t

      That’s a fair assessment. The issues you were having are software related and not due to BB10 devices needing “better specs” like you originally said. 10.2 does fix a lot of software issues from launch but BB still needs to do a lot of work on it. For a first generation OS which isnt even a year old yet, Id say they’re doing pretty damn well. I will also agree with you on the lack of apps. That is also a lot better than before as we recently received a third party instagram app and apps like Vine and Snapchat are being worked on by third parties as well.

      Im glad you’re happy with your HTC One, it’s a great device. But your original statement of BB needing better specs and Android I fully disagree with. You even said it yourself, BB10 is fluid so you must have liked something about it.

  • Johnny S.

    RIM fanboys still thinking that BB has hope. How delusional.

    • Dimitri

      This can be said for a fan boy for any company. Anything else you would like to point out which is the same of any fan boy for all companies?

    • MXH070

      Lets wait and see how Google and the android OEM’S fair on the patient law suit that has been dropped on them by Sony/Apple/blackberry/Microsoft/rockstar. Guess those Nortel patients are coming in handy now, BlackBerry might be getting a nice windfall from Google.

  • hardy83

    Good for him. He deserves the millions in bonuses and the sweet retirement package.
    All that hard work firing thousands of people who got crap compensation packages, doing little to save the company.

    That sounds like a well deserved 10+ million dollar package to me!
    Go Capitalism!
    The few succeeding off the backs of many.

    • Ren596

      Well Is Less that was stated 22Mil and Not 55Mil

    • hardy83

      Well then it’s all good now. I’m sure trickle down economics will kick in and help those thousands of hard working people who got laid off from the guy who basically did nothing for a year or two and got 22 million.

    • Ren596

      That’s Not What I Meant {OOPS}

      I Meant to say that: I could been worse TH was supposed to get a MIN of $55 Mil he got 40% of the he would have got if the FF Deal went through.

      Yes Its Still $%#%$# for the People he let GO

  • 01011001001

    no one and I repeat no one will save blackberry, the reality is a small population wants their product but not enough to run it as a business that will be profitable and supported by app developers.

    • kkritsilas

      Reality is, even in an environment that has a high security requirement, both the iPhone/iOS and Android phones with Samsung’s Fort Knox suite have been approved, by the US Gov’t and the US Military. The so called “securIty features” of Blackberry are no longer unique. Add to that the cost of BES servers (and the required people to manage and maintain those BES servers) that are not required by iOS or Fort Knox running on Android, and the cost justification for BB is getting harder and harder to make. Even if iOS and Android/Fort Knox were not as good as BB, there is not enough of a customer base to make BB viable.

      The Toxic Twins (Lazaridis and Ballsilie) basically killed BB (then RIM) in 2007 when they failed to recognize what a change the iPhone represented in the handset market. They kept on shipping the same old, same old, with unusable web browsers, and roller ball or touchpad interfaces, when the market had started to move to touchscreen interfaces. They stuck with “power users want a physical keyboard” mantra, and bled off marketshare daily. When they finally, after a couple of really bad attempts (see Storm/Storm 2) at a touch screen phone, come out with something that had a touchscreen (Torch 9800/9810) it looked very dated to the competing units from Apple and the Android camp. It took them until this year to come up with a fully competitive line of handsets, but that ship has long sailed. People have bought into the iOS and Android eco-systems, and they are not leaving unless something truly revolutionary comes along, and the X10/X30/Q10/Q5 are NOT it.

      In addition, the absurd way that BB would obsolete even recent devices became very apparent when the iPhone came out. Apple launches an iPhone, and usually a new version of iOS to go with it. They also allow older phones to upgrade to the newer OS, hardware permitting. See the iPhone 3GS go from IOS 3 all the way to 6 (4 major releases). Blackberry used to come out with a new version of BB OS (say from 5 to 6, or 6 to 7) when launching a phone, and does not allow previous phones to upgrade to the newer OS versions, even though hardware wise, it would have been perfectly feasible (see Torch 9800 not being able to run BB7), even though the phone might only be a few months old. This becomes a form of enforced obsolescence AND fragmentation. A developer must write different versions of the same app for the different OS versions, increasing the costs to bring the app to market, and limiting its customer base. Is it any wonder BB can’t attract a large amount of developers?

      They did the same sort of thing with the Playbook. They announce the Playbook, with crippled software, but the promised features that were supposed to be in the original release take over a year to be released, even though promises were made, they were broken, repeatedly. Blackberry announced that the Playbook would be able to run Android apps. A great way to immediately increase the number of apps available for both the Playbook and the BB10 phones. Guess what? Cancelled.

      Is it any surprise they will go under, or at least become a software and patent company? It isn’t to me.

  • Josh Brown

    Did I miss something? How is the billion dollars going to save them? If you are spending more than you bring in isn’t taking on debt just delaying the inevitable? Unless you have a clear plan of what that billion dollars will do to drastically change the company I can’t see anyone lending it to them.

  • bigshynepo

    Fired to the tune of 22 Million…
    Probably the best day of Heins’ last few years.
    He only had to kill blackberry to get it.

  • Acer12345

    I agree with no sale, but no innovation seriously? BB10 was all innovation.

  • Ulysses Grant

    OMG..Fairfax deal was the closest it could get to heaven and they blew it. I think Heins have done a great job. This company wasn’t very easy to run but I wish it will be saved. There are thousand of people will lose their jobs if this company goes down including some of my friends who work there. That is a big no-no.

    • Tom

      Thousands of jobs will still be lost even if the company stays alive.

      I predict the company will have to follow in Sega’s footsteps. No more hardware, just software, with an even smaller workforce than before. It’s a shame, but sometimes good decisions aren’t desirable.

  • 01011001001

    how many hardware do you think they can sell to gov’t or corporations worldwide? is that 10, 20m, 100m? and yet they’ve not sold anywhere close to any of these numbers.

    • Acer12345

      Those governments and corporations rely on the security and enterprising solutions that BlackBerry provides. There are not a lot of competing companies in regards to those services.
      It’s not just about “handsets sold”.

      At worst case, they’ll completely exit the consumer market and go for a niche market of security/enterprise.

    • 01011001001

      I’m not arguing that those gov’t or corporation will continue to use blackberry’s and again I ask the question how many hardware will blackberry continue to sell to be a profitable business?

  • InkyJack

    I do not understand why people keep talking about the loss of jobs, they have already lost tons of jobs world wide and thousands of jobs at home here in Canada. This company over the years has consistently not adhered to market demands, whether people agree or not about the demand in the market place, ANY business that needs to succeed has to look at their demographics and adjust their products accordingly to supply these people with devices and software that THEY want, Blackberry FAILED at this, instead letting go of their lead in the industry to the like of Apple and Android, just by sitting on their butts and producing the same phones year after year, without any major change in hardware or software. THEN, because they lost all their market share, and were not considered a major player anymore, they come back into the market late as ever, and introduce an entirely new software system through QNX, and whether or not the QNX OS is superior to Android or iOS, is not the problem, the problem is that the demand for a new OS, with outdated Hardware(as per market indicates) was very little to start with, so its an uphill battle with a struggling company…people this makes NO sense as a company that is struggling…
    I lost my faith in this company a long time ago, and i’m not going to find it again, just because they are a Canadian company, i’m sorry to say, however in my opinion this company has failed to keep me interested and I have moved on…

  • segz

    Well i don’t see this as being all that bad. If they get someone in there who knows what they’re doing things could possibly turn around for them. What kills blackberry is the lack of apps. Their phones are not horrible as well as their OS… I have tried the z10 and the only reason I didn’t stick with it is because of the lack of apps.

  • vn33

    Globe and Mail reports he may get a 22M golden handshake.
    Wonders what the poor souls who got laid off got ?

    2 Weeks ? A week for every year of service ?

  • dr evil

    Hahahaha. To all the mindless bb shills out there: told ya so.
    And now they will officially dissolve into the wasteland! Ha ha.

  • PT

    This scumbag should be in jail for company fraud. Why does he getting servance paid for screwing the compay is beyond anyone imaginable.

  • Omis

    Pfft I could have bankrupted the company for a fraction of that money.

  • kroms

    Thorstein Heins Paid $22m to leave BB.
    Fairfax could not raise the necessary 4.7B in funds.
    BB Smartphone Sales are POOR to non existent.

    You don’t need a degree to figure it out.