BlackBerry has abandoned plans to sell itself and has instead found about $1 billion in new funds that it will use to try to turn its business around. The company is also planning far-reaching changes to management and will remove both its CEO Thorsten Heins and some directors. Heins is replaced by former CEO of Sybase John Chen.
The new decision from BlackBerry follows the end of a buyout deal by financial firm Fairfax Financial Holdings earlier in the summer. The deal was said to be in the range of $4.7 billion, and Fairfax had until today to study BlackBerry’s books and make an offer. Whatever Fairfax found in the company’s finances and its business model for the future is unknown, but it is now irrelevant because BlackBerry has changed course. Even during the period when Fairfax was courting BlackBerry, a number of other big-name buyers were said to be interested in the formerly giant smartphone maker. Fairfax is now merely one of the lead investors.
BlackBerry is selling a new form of convertible stock to the new group of investors, raising extra capital with which it can retool and restaff to point the company in a new direction. The maneuver suggests that, despite losing significant staff and nearly all its standing in the marketplace, the company’s management feels it can survive as a going concern.KE