Wireless Wednesday–BlackBerry agrees to be acquired by Fairfax Financial Holdings Limited
September 25, 2013 — by WEBOOST
This week we’re talking about the somewhat shocking news about Blackberry. Check out the following excerpts from the Washington Post article pasted below–
BlackBerry announced Monday that it has agreed to be acquired by Toronto-based Fairfax Financial Holdings Limited for $4.7 billion.
The beleaguered smartphone company said it had signed a letter of intent with Fairfax, which owns about 10 percent of BlackBerry’s common shares. The deal would deliver about $9 a share to shareholders and take the company private.
Once an essential accessory for Washington insiders, BlackBerry has faltered in its competition with popular smartphones such as Samsung’s Galaxy and Apple’s iPhone. It has just 3 percent of the worldwide smartphone market, according to a second-quarter report by the IDC research firm.
“This is BlackBerry’s last ditch attempt to simply survive in the face of crushing competition in a market it essentially invented,” said Anthony Michael Sabino, a business professor at St. John’s University.
Last week, the company announced it will lay off 4,500 employees, about 40 percent of its workforce, and post nearly $1 billion in losses in its second quarter. The firm said that most of its writedown would come from its inability to clear stockpiles of its latest BlackBerry 10 device, which it once considered critical to its turnaround efforts.
After trading in the company’s stock was briefly halted, the shares rose about 1 percent after the announcement Monday. They closed at $8.82. The company’s stock has fallen about 14 percent during the past month.
Despite its declining fortunes, BlackBerry was considered an attractive takeover target. It has $2.6 billion in cash, no debt and coveted software and hardware patents, analysts have said.
What do you think of this news? What does BlackBerry need to do in your opinion to stay relevant in their space? Let us know in the comments section below, or on Facebook/Twitter.
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