Blackberry (formerly "Research In Motion")

[CityFarmer]

One news article shows the situation is caught by surprise to management. The decision is made few months ago. It shows situation can deteriorate faster than the management thought.

BlackBerry bought private jet 2 months before loss announcement

LONDON — BlackBerry bosses bought a private jet worth more than US$20 million (S$25 million) two months before the firm announced a near US$1 billion loss and plans to lay off 4,500 staff.

The company, which has struggled to keep up with competition from Apple’s iPhone and Google Android-powered devices, bought a secondhand Bombardier Global Express jet in July, according to the Wall Street Journal, which scrutinised Canadian aircraft registry records.

It is not known how much BlackBerry paid for the jet, which can carry up to 19 passengers, but similar planes are advertised for between US$25 million to US$29 million.

The aircraft was delivered to executives as the company was running at losses of more than US$11 million a day. Last week the Canadian company said it lost between US$930 million to US$955 million in the three months to the end of August and warned its 12,700 staff that 40 per cent of them will lose their jobs.

“Several years ago, the company bought two medium-range Dassault aircraft,” BlackBerry said in a statement. “Earlier this year the company decided to sell both planes and replace them with one longer-range aircraft. The company considered several options and selected a used Bombardier aircraft, which was eventually delivered in July.”

BlackBerry has now decided to sell the plane. “In light of the company’s current business condition, the company has decided to sell that aircraft and will no longer own planes.” THE GUARDIAN
http://www.todayonline.com/tech/blackber...-staff-cut

[mulyc]

Going down. Down to chinatown.

Even the Indonesians (their largest market) have shifted away from the BB towards iPhones and androids already.

[CityFarmer]

It is not to rub salt into the wound, but to show one of the reasons Blackberry failed. It is totally disconnected from youths in the consumer market.

BlackBerry? Totally not cool, say young users

ONDON — If you want to know how BlackBerry lost its mojo in a major consumer market, spend some time with a bunch of British teens.

The phone that once so dominated the UK youth market that its messaging service BBM was even blamed for helping to connect young rioters who fought police and wrecked shops in London and other cities in 2011, has now lost its cool.

An annual CoolBrands list, compiled by 3,000 consumers and 38 experts and released this week, also showed BlackBerry had plummeted to the 180th spot in the list of Britain’s coolest brands from fourth three years ago. Apple was top for the second year.

It was clear BlackBerry has been usurped by Apple and Android-run phones, and BBM has been eclipsed by the emergence of free messaging apps that work across a range of devices.

“I use WhatsApp and Kik with all my friends and family. You can use these on any device even if you can’t afford an iPhone,” said 14-year-old Euan McPhillips, a schoolboy from Gerrards Cross, just north of London.

US-based WhatsApp and Canada’s Kik Interactive are two of five major “cross-platform” messaging services that have built up big followings and which are also being tipped as the next big takeover targets for the likes of Facebook and Yahoo.

The three others are WeChat in China, developed by Internet company Tencent Holdings and promoted by Argentine footballer Lionel Messi; South Korea’s KakaoTalk, run by privately-held Kakao Corp; and Japan-based Line, a unit of Naver Corp of South Korea.

The grandfather of the group, WhatsApp, created by two ex-Yahoo engineers in 2009, has more than 300 million users and processes 31 billion messages a day, a spokeswoman told Reuters, making it bigger than Twitter in terms of active users. That compares with BBM’s 10 billion messages a day.

BlackBerry’s image has taken a big hit as a result, underscoring the challenge facing the consortium led by its top shareholder Fairfax, which agreed to take the company private yesterday (Sept 25) in a US$4.7 billion (S$5.9 billion) deal. REUTERS
http://www.todayonline.com/tech/blackber...oung-users

[CityFarmer]

There is a good summary on the slow death of Blackberry in the latest issue of The Edge.

Blackberry owns US$1 billion worth of patents, and has US$2.5 billion in cash. The sale to Prem Watsa is US$4.7 billion. Forward projected EBITDA is US$200 million. Base on these info from the article, Mr. Watsa bought it with US$1.2 billion (net of cash and patents), and a Price/EBITDA of 6, which is not cheap, IMO.

[CityFarmer]

The sale agreement with Mr. Watsa might not be the final result, although I doubt the others will bid higher.

Cisco, Google, SAP discussing BlackBerry bids: Sources

NEW YORK — BlackBerry, on the block as its smartphone business struggles, is in talks with Cisco Systems, Google and SAP about selling them all or parts of itself, several sources close to the matter told Reuters.

Such a deal would be an alternative to the preliminary agreement reached weeks ago with a group, led by BlackBerry’s biggest shareholder, Fairfax Financial Holdings, to take the company private for about US$4.7 billion (S$5.86 billion), a bid which has faced some scepticism because of financing questions.

The company, based in Waterloo, Ontario, has asked for preliminary expressions of interest from potential strategic buyers, which also include Intel and Asian companies LG and Samsung, by early next week.

It is unclear which parties will bid, if any. But the potential technology buyers have been especially interested in BlackBerry’s secure server network and patent portfolio, although doubts about the assets’ value remain an issue, the sources said.

Google, Intel, Cisco, LG and SAP declined to comment. Samsung was not immediately available for comment.
...
http://www.todayonline.com/tech/cisco-go...ds-sources

[junming82]

I feel that Prem Watsa, being dubbed the "Warren Buffet of Canada" is buying Blackberry at an attractive price. His offer of $9 a share is about half of book value of $18 per share. Since the announcement to take the company private, the share has decline from $10 to $7.70.
Moreover, Prem Watsa has invested extensively in Blackberry since 2011. Watsa was thrilled to be buying at “the point of maximum pessimism” he said in his 2012 annual letter, paying an average of $17 per share for his 10% stake.
BlackBerry is currently Watsa’s largest holding, at 21.8% of his total assets managed. His total ownership is 10% of the company’s shares outstanding. Watsa said: “We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees. We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”

Being an value investor, this is truly holding true to one's belief and buying the stock when everyone is shunning it
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Disclaimer: This is not a buy or sell stock tip. Please do your own research. 
Value investing blog: http://valuestocksinvesting.blogspot.sg/

[specuvestor]

There are many "Buffetts" around the world... Asia also had its fair share of come-and-go "Buffetts". Watsa must be ultra thrilled to get the stock at 1/2 price to his $17 stake. But Kudos to him on his conviction... just hope it's not a foot in the door phenomenon since it is 22% of his portfolio.

Since we're talking about Buffett, there are good reasons why Buffett shunned tech and why he (or more probably the 2 FM) bought Intel and IBM.

IMHO unlike Kodak or Nokia or even Sony, I don't think Blackberry has any critical technologies for smartphones. Let's wait and see... as usual no tickets are required to watch on sidelines.

[CityFarmer]

There are many "Buffetts" around the world... Asia also had its fair share of come-and-go "Buffetts". Watsa must be ultra thrilled to get the stock at 1/2 price to his $17 stake. But Kudos to him on his conviction... just hope it's not a foot in the door phenomenon since it is 22% of his portfolio.

Since we're talking about Buffett, there are good reasons why Buffett shunned tech and why he (or more probably the 2 FM) bought Intel and IBM.

IMHO unlike Kodak or Nokia or even Sony, I don't think Blackberry has any critical technologies for smartphones. Let's wait and see... as usual no tickets are required to watch on sidelines.

The only valuable tech is the push-email? Is the tech still relevance and in-dispensable nowadays?

[yeokiwi]

The only valuable tech is the push-email? Is the tech still relevance and in-dispensable nowadays?

I think it is the secure management of information that is valuable. It may not be unbreakable but many countries had requested BB to deliver the messages in clear to them for national security purpose.

At least, in comparison with whatsapp, wechat or whatever, BB messaging is much much more secured than them.

[specuvestor]

U read my mind Push-mail was the KEY technology and driver for Blackberry when MSFT exchange sucked, and the security as yeokiwi mentioned.

The irony according to my IT friend is that BES 10 is not backward compatible. Talk about shooting own foot.

The only valuable tech is the push-email? Is the tech still relevance and in-dispensable nowadays?