Fairfax purchases BlackBerry amidst financial turmoil
Image by Jamie Sturgeon via Global News
Following an immense second quarter loss of close to one billion dollars -largely due to its vastly unsold inventory-, BlackBerry is headlining Business news once again; though, for a different reason.
On Monday, September 23, BlackBerry Ltd. accepted a purchase offer by a group led by Toronto based Fairfax Financial Holdings Ltd.
The news emerged merely days after BlackBerry’s massive quarterly losses but amidst the negativity, the deal may signal a positive change for BlackBerry as a company.
According to Blackberry, the company sold merely 3.7 million smartphones inQ2, and said that the cutting of 4,500 jobs (one-third of its workforce) will “stabilize the business and allow them to potentially keep going”. 1 Analysts such as Iain Grant from the strategy firm SeaBoard Group praised the deal, citing that “taking it private [is] the only way to save anything”. 1 Selling at a steeply discounted $9 (US) per share, the Fairfax led group of associates have six weeks to complete the deal.
BlackBerry has failed to capitalize on its Key Operations Principles (Processes, inventory, variability, capacity, measurement, quality) and has held poor points of parity and difference compared to competitors such as Apple and Samsung. Nevertheless, in the end, a tentative deal to take BlackBerry private will provide the company with less scrutiny and more time to focus on the business-oriented target market.2
Sources:
1 http://www.cbc.ca/news/canada/blackberry-takeover-offer-buys-company-time-1.1865640
