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  • Anatomy Of A Takeunder: Blame The Insiders 6 comments
    Sep 25, 2013 7:41 AM | about stocks: BBRY

    As a dark, misty cloud falls over Waterloo,Ca, the hometown of BlackBerry (NASDAQ:BBRY), investors are left to ponder all the misdeeds that have been cast upon the storied smartphone innovator. Mike Laziridis, founder and engineer visionary, built the smartphone innovative company on the promise of short messaging service "sms" messaging even before the phone was incorporated into the device. Here is a picture of the early RIM 950 pager/sms text messaging device in the bottom left:

    (click to enlarge)

    Of course, sms has come a long way since the introduction of this device. But it is the easiest and most popular way for phones to become smart, even more popular than email with the younger generation.

    So how did such an early innovator with a great head start on the coming text craze go so wrong so quickly. Remember, that BlackBerry was the communication device leader as recent as 2008 and since then the stock chart looks like a view from the side of Mount Everest : (click to enlarge)

    We think that it important to look at the insider ownership and the leadership in the company to figure out what happened since 2003 and what is happening now. First, lets take a look at visionary founder/insider Laziridis and his insider Co-CEO Jim Balsillie pictured here in happier (tongue in cheek) times:

    The Guardian has some of their now infamous/ridiculous quotes here:

    "On new technologies: "Cameraphones will be rejected by corporate users." - Mike Lazaridis, 2003.

    On the threat from the iPhone: "[Apple and the iPhone is] kind of one more entrant into an already very busy space with lots of choice for consumers … But in terms of a sort of a sea-change for BlackBerry, I would think that's overstating it."- Balsillie, February 2007.

    On the iPhone (again): "Again, I have said this before and I will say it again; Apple has done the industry an enormous favour because they basically told the world to expect a media player [the iPod] as a software feature on a good smartphone. As the leading smartphone appliance company and platform company, we could not buy that kind of validation for $100m."- Balsillie, April 2007.

    On the iPhone: "As nice as the Apple iPhone is, it poses a real challenge to its users. Try typing a web key on a touchscreen on an Apple iPhone, that's a real challenge. You cannot see what you type." - Balsillie, November 2007.

    On the tablet market: "So the question you have to ask yourself is when it comes to tablet, what market or what opportunities, still, it's solving, what problem is it solving, and is it just a replacement laptop? I think that's a difficult one to judge." Lazaridis, April 2010."

    Of course, they could not have been more wrong. There has been recent talk of Laziridis mulling a bid of his own to take BBRY private. I really don't see how anyone would finance him in this effort, do you?

    Next up, we have Prem Watsa, the Chairman and CEO of Canada's Fairfax Holdings and until recently, often regarded as the Warren Buffet of Canada. I think he may have shed that reputation like a snake shed's his skin. Here is why and not to reinvent the wheel, I will quote from fellow SA writer Quoth the Raven who sums it up for me here in this excerpt:

    It's Starting to Just Simply Look Like Fishing

    In light of all the news that came out last night, it's starting to look like an operation simply set up to bring in other bids on the company.

    You don't need to be an MBA student to realize that there isn't a lot of substance behind the Fairfax deal ...

    ...between now and the time the buyout will close (if they find financing, remember), it's starting to look like this bid may have been intentionally set up like this to try and tip over a long line of dominoes in a bidding war.

    The problem? No one else seems to be interested in buying BlackBerry. ...

    Quoth, you had us at "Fishing"! The worst of it is that Watsa is an insider with 10% of the company. And he recently resigned from the board in order to avoid "conflicts of interest". Well, to be sure, this avoidance has not materialized. I think the class action lawsuit firms like Millberg LLP, Slater & Gordon and Pomerantz Grossman Hufford Dahlstrom & Gross LLP are licking their chops to file something against this board. We just hope Watsa's Fairfax insurance companies are not the issuer of the BBRY D&O policy.

    We are of course upset at what has happened here at BBRY. The BB10 technology was and is sound. The marketing and rollout of the devices using it has been dreadful at best. CEO Thorsten Heins need to resign and give up his severance package in order to save what skin and honor he has left after this horrible last 9 months. We know there are a lot of angry investors. Is there value in BBRY, yes but the insiders such as Watsa and Laziridis have done their utmost to query any quest to find it. To us, what should have been a time for either the resurrection or takeover of BBRY has become a time to watch a takeunder- when the price of the first deal is the high bar from where the next participants most likely bid less than the first bidder. Three words sum this up for us: mad, bad and sad.

    Disclosure: I am long BBRY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: But selling calls to hedge my position and capture volatility.

    Stocks: BBRY
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Comments (6)
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  • Tufenk
    , contributor
    Comments (935) | Send Message
     
    Author’s reply » $BBRY Watsa and Laziridis to blame!
    25 Sep 2013, 07:44 AM Reply Like
  • Tufenk
    , contributor
    Comments (935) | Send Message
     
    Author’s reply » $BBRY Takeunder, can't stand TH or Prem!!!
    25 Sep 2013, 12:18 PM Reply Like
  • Tufenk
    , contributor
    Comments (935) | Send Message
     
    Author’s reply » $BBRY http://seekingalpha.co... this smells so bad
    25 Sep 2013, 12:19 PM Reply Like
  • Loon-a-tick
    , contributor
    Comments (1928) | Send Message
     
    Sorry buddy ...didn't see this until tonight. In my opinion ...if it goes Private....we never get to find out the truth.
    25 Sep 2013, 10:03 PM Reply Like
  • Infinity Group
    , contributor
    Comments (572) | Send Message
     
    wow, thats all I can say.
    Really want to sell at $8 now, but thats emotion so I will hold until I can think clealry. and spell
    25 Sep 2013, 10:08 PM Reply Like
  • Arduino_RaspberryPi
    , contributor
    Comments (376) | Send Message
     
    Mind got clouded by the soundness of the product. Forgot that it is the engineers, designers and others not the BOD and CEO responsible for that.

     

    George why do I keep ignoring your wisdom:
    http://bit.ly/19H9GBg
    26 Sep 2013, 12:21 AM Reply Like
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