BlackBerry lost nearly $1 billion in second quarter, or the lousy end to a hell week
A woman looks at a Blackberry at the New York Times Schools For Tomorrow Conference on Sept. 17, 2013 in New York City. The Wall Street Journal reported on Sept. 18 that BlackBerry intended to cut 40 percent of its workforce.
Speaking as a Canadian, I’m saddened at BlackBerry’s sudden and nearly total demise.
That the former Research in Motion pioneered much of the mobile technology so widely used today was a source of national pride.
Now, speaking as a Canadian whose friends are losing their jobs at BlackBerry because their employer was so arrogant and poorly organized to react to changing markets, I’m just angry.
There doesn’t seem to be anything that will bring BlackBerry back from the brink. Let’s look at what’s gone wrong at the Waterloo, Ontario company … in the last week.
Friday
BlackBerry reports losses of $965 million in the second quarter of 2013. Yes, nearly $1 billion.
“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” BlackBerry president Thorsten Heins said.
Disappointed? I should say. It was a 45 percent drop in revenue.
Don’t worry, he says, BB still has lots of cash and no debt.
“We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company,” he added.
Let’s hope those targeted markets are there on Monday.
Thursday
T-Mobile announces it won’t sell BlackBerry handsets anymore. Other wireless providers, including those in Canada, remain quiet about their plans … for now. Share prices fell to $8.01 on the NASDAQ.
Wednesday
One of the company’s suppliers, Jabil Circuit Inc., announces that it is breaking up with BlackBerry. It’s not you, it’s me? No, it’s you.
“BlackBerry has been a great partner over the past six to seven years and we believe that they will offer their typical high integrity co-operation as we navigate this probable disengagement in the coming months,” Jabil CEO Mark Mondello told Canadian Press.
Tuesday
Regulators announce Heins and BlackBerry CFO Brian Bidulka sold half of their newly vested shares just before an announcement about huge losses.
It saved them about $22,000. There’s nothing wrong with what they did, it was part of regular stock transactions. It does give us the opportunity to remind everyone that BlackBerry stock was once worth about $140 per share. It’s now worth about $8.
Monday
Investment firm Fairfax Financial announces a $4.7-billion deal to purchase BlackBerry. This comes as BlackBerry says it will stop focusing on consumers, and instead concentrate on corporate customers.
Fairfax already owns 10 percent of BlackBerry stock, and it wants the company to regroup away from Wall Street’s prying eyes. So this is good news? It could be, if Fairfax can find enough investors to join the party.
“They’re just trying to buy themselves some more time here,” analyst Mike Genovese told reporters. “This does not read like an actual deal; this is an announcement to stem the bleeding and buy some time.”
Ouch.
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