Beleaguered smartphone maker Blackberry has abandoned it’s plans to find a buyer, instead the company says its chief executive will stand down after nearly two years in what has to be the toughest job in the techsphere.
Former software executive John Chen will serve as interim chief executive of the Canada-based firm, replacing Thorsten Heins. Blackberry has also announced plans to try and raise more than $US1 billion in fresh financing.
The announcement sparked a 16 percent plummet in Blackberry’s share price, raising fears the struggling smartphone maker is running out of options.
After a two-month review of strategic options and talks with potential buyers including Facebook and Lenovo, Blackberry says it will now completely abandon a sale ::::
Instead, it will issue convertible notes to a group of long-term investors including its largest shareholder, Fairfax Financial Holdings. The only formal offer to buy Blackberry – a tentative one – had come from Fairfax, which wanted to take the company private for $US4.7 billion. Fairfax will now end up with $US250 million of the debt offering, Blackberry gave no reasons for the change.
Mr Chen’s appointment was a surprise to investors, as was the departure of Mr Heins, who will leave in about two weeks after the debt offering is completed. There are rumours wafting around the tech-ether that Mr Chen will be more than an interim CEO, he seems to be up for a mega pay packet, suggesting longevity.
Our source says that Mr Chens package will be very close to $100 million package, made up of around $US3.5 – 4 million in salary and shares valued at between $US90 – 95 million, most likely vested over 3 -5 years. If our source is correct, either Blackberry hasn’t learned a thing from the past few years, or they’ve learned a bunch.
Mr Chen’s Package is only worth anything if he can keep the business going, clearly Mr Chen hasn’t got much – other than reputation – to lose, his windfall would be substantial if he’s able to drive the business forward, Blackberry shares are at record lows and seemingly on a perpetual slide backward.
Blackberry pioneered email on portable devices, for years its pagers and phones were must-have devices for political and business leaders, but it has lost market share to Apple’s iPhone and the multitude of clever devices powered by Google’s Android software.
In a letter to employees, outgoing CEO Thorsten Heins said he remained Blackberry’s biggest fan, and will keep cheering from the sidelines. It’s not without motive, Mr Heins departs with a solid cache of company stock – more than $US20 million – if the company is about-faced, he stands to make a large fortune.
UPDATE! 7 November, Blackberry has confirmed Mr Chen’s Package: It isn’t quite as loaded as our source suggested, close though. He will receive a base salary of $US3 million (including bonuses) He’ll receive 13 million shares over the next 5 years, at today’s value thats around $US 85 million. If Mr Chen’s employment is terminated without cause he will receive his salary for the remainder of that year, plus two times his base salary and bonus, a total $US6 million.
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