BlackBerry founder Mike Lazaridis walks away from possible deal
Lazaridis has sold more than $26 million of Blackberry stock in the past two days, according to a regulatory filing
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San Francisco: BlackBerry Ltd co-founder and former chief executive officer Mike Lazaridis walked away from a possible takeover plan and reduced his stake in the struggling smartphone maker after it ended an attempt to sell itself.
Lazaridis now owns 26.3 million shares, or 4.99% of its outstanding shares, according to a regulatory filing on Wednesday. The former BlackBerry executive, who earlier this year had considered making a bid for the Waterloo, Ontario-based company, sold more than $26 million of stock in the past two days, according to the filing. Together with co-founder Doug Fregin, he had controlled about 8% of the stock.
Following the collapse of a $4.7 billion buyout by Fairfax Financial Holdings Ltd last month, BlackBerry ended its strategic review, opting instead to raise $1 billion in convertible debt and seek a new CEO. Former Sybase Inc. chief John Chen was named executive chairman and interim CEO. The $1 billion infusion helped stabilize the unprofitable company, giving Chen time to craft a turnaround plan.
Lazaridis and Fregin had hired Goldman Sachs Group Inc. and Centerview Partners LLC to evaluate their options for a possible deal. Today, they terminated that agreement, according to the filing.
BlackBerry shares have lost 35% of their value this year amid plunging sales and mounting losses. Fregin owns about 2.3% of outstanding shares, according to Wednesday’s statement.
Revenue fell 56% to $1.19 billion last quarter. That missed the average estimate of $1.59 billion in a Bloomberg survey of analysts. BlackBerry posted a loss from continuing operations of 67 cents. Analysts had predicted a loss of 46 cents.
Still, BlackBerry’s stock got a boost last week after the smartphone maker struck a five-year deal to have Foxconn Technology Group manufacture its devices. The partnership will help cut production spending and stave off the inventory gluts that have plagued the company.
Foxconn will make phones for BlackBerry at plants in Indonesia and Mexico. BlackBerry will own all of its intellectual property and handle quality assurance through Foxconn, an Apple Inc. supplier and the world’s largest manufacturer of electronic products. The shares jumped 16% after the announcement. Bloomberg