Disaster just struck a company that was already on life support.
Rapidly becoming a dinosaur in the iPhone age, BlackBerry (BBRY) just absorbed another major blow as CEO Thorsten Heins elected to step down and the company abandoned its plan to go private. The double dose of bad news is already pushing BlackBerry shares down 11.5% in early Monday trading.
Two months ago, it appeared that BlackBerry had a deal. Fairfax Financial Holdings (FRFHF), a Canadian insurance firm, had agreed in principle to buy BlackBerry for $4.7 billion. As it turns out, Fairfax didn’t have enough capital to finance the deal.
With the Fairfax deal having fallen through, it appears the company’s CEO is abandoning ship. Heins took over as CEO in January 2012, vowing to turn around BlackBerry’s struggling brand. Twenty-two months later, Heins is calling it quits.
BlackBerry has been for sale since August after years of decline. The company used to account for half the U.S. smartphone market. Today its market share has dwindled to a measly 2%.
Heins attempted to rebrand by releasing a fancy new BlackBerry 10 all-touch smartphone to replace its outdated original BlackBerry device back in January. The company also changed its name from Research In Motion (RIMM) to BlackBerry Limited.
The rebranding failed to gain traction with consumers or investors.
Like the company’s smartphone market share, BBRY shares have been in furious decline. Since peaking at $83.62 in September 2009, BlackBerry shares have been in an all-out tailspin, falling 91% to just over $7 a share entering the day. At this rate, the stock will be worth nothing within a year or two.
Without the Fairfax deal, BlackBerry is now forced to go back to the drawing board in search of a new potential buyer. And the company must do so without a full-time CEO.
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