The familiar scent of Blackberries.
Wall Street investors seem happy to take what Fairfax Financial Holdings is offering for Blackberry and let the dwindling mobile phone company waft away in the wind. Subtract out the cash that Blackberry is holding, and the net sale price is about $2 billion, a sad end to a psychedelic slide that began at $83 billion five years ago.
Like Microsoft’s purchase of Nokia, Fairfax’s offer seems to be based on the chemically impaired notion that Blackberry isn’t in the final stages of a terminal crash. Fairfax head Prem Watsa babbled about “execution of a long term strategy” in a press release but, according to the San Jose Mercury News, he’s a fan of Blackberry’s two biggest and most recent flops, its new CEO and operating system…
Watsa is likely to keep current CEO Thorsten Heins in the job. He said in April that he’s a big supporter of Heins and has called his promotion the right decision. He also said he’s excited about the company’s new BlackBerry 10 operating system.
Watsa has a reputation as a savvy investor, so he might just be blowing smoke to keep the headquarter troops in Waterloo, Ontario from coming down with the shakes. There are three ways to suck $2 billion in value out of the deal: 1. sell off Blackberry’s intellectual property, 2. milk its remaining 50 million customers for whatever they’re worth and 3. try to turn it into a much smaller mobile and IT services company, providing security and backend support to other platforms.
But as it stands, Blackberry isn’t even worth stems and seeds anymore. Without a thorough corporate detox, Watsa will be just licking the ashtray.