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BlackBerry CEO quits as buyout bid fails

BlackBerry CEO Thorsten Heins has been forced to quit, according to reports. The news comes as one of the beleaguered Canadian smartphone manufacturer's main backers, Fairfax Financial Holdings, failed to fund a $4.7 billion (£2.95 billion) buyout bid, and has instead acquired $1 billion (£627 million) from various investors to attempt to bring the company back to profitability.

BlackBerry has struggled in the marketplace since consumers started using their preferred iPhones and Android devices in the workplace as a result of BYOD policies. After peaking at $145 (£90) in 2008, BlackBerry's stock has shrunk by a shocking 94 per cent.

After battling on for years, the Canadian smartphone maker had tentatively agreed in September to sell itself to Fairfax, but the money just wasn't there. Facebook and Chinese manufacturer Lenovo have both been tipped as possible buyers. Instead, after "a thorough review of strategic alternatives," the company has decided to raise money by selling debentures, or convertible debt, to its major shareholder.

The news has stunned commentators, and BlackBerry's shares have plummeted 18 per cent since the first reports.

In a statement released today, the company announced that "Mr. Heins will step down as Chief Executive Officer at closing and Mr. [John S.] Chen will serve as Interim Chief Executive Officer pending completion of a search for a new Chief Executive Officer."

The company insists on seeing the move as a positive step.

"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors," said Barbara Stymiest, Chair of BlackBerry's Board.

"This financing provides an immediate cash injection on terms favourable to BlackBerry, enhancing our substantial cash position," Stymiest added.

She went on to praise new interim CEO John Chen as "a distinguished and proven leader in the technology industry."

Chen, who was the chairman, CEO and president of independent software vendor Sybase, said "BlackBerry is an iconic brand with enormous potential – but it's going to take time, discipline and tough decisions to reclaim our success."

Still, with shares continuing to fall, it might take a little bit of luck, too.