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BlackBerry (TSX:BB, NASDAQ:BBRY) “revolutionized mobile phone technology when it was introduced in 1999.” If you were there – and it’s likely, if you are reading this story, that you were – you should remember it well. “I’ve got a BlackBerry,” was the status symbol phrase of the day. Those of us withregular cell phones watched in awe as our “friends” demonstrated what they could do with their Blackberry.
In a perfect picture of the rapidly changing world of cellular phone technology, Blackberry’s “popularity was badly dented by the launch of Apple’s iPhone in 2007 and has since lost out to Android phones.” I remember 2007 very well. That’s when I would casually show off my iPhone to every one of those losers stuck with a BlackBerry that suddenly looked like a miniature word processor with its tiny little keyboard and screen. What a great year that was!
Blackberry’s share price is currently at $11.13 CDN on the Toronto Exchange. It has edged upward since 29 July, when it was below $9.00, largely on growing rumors that the company would be put up for sale in the near future. It’s performance on the NASDAQ has been virtually the same of late as it has broken sharply upward since 29 July from about $8.70 USD to $10.78. Apparently investors agree with the board that a sale is the best strategy for the company.
Speaking of boards and investors, Prem Watsa, the CEO of Fairfax Holdings (TSX:FFH), has tendered his resignation from Blackberry’s board of directors to “avoid potential conflicts that may arise during the process” of selling the company. According to the Toronto Globe & Mail, Fairfax is exploring ways to create an entity to acquire BlackBerry. Fairfax is already BlackBerry’s largest shareholder. This leads one to believe that Watsa still believes in the company’s potential.
Once Blackberry began losing market share, it just seems that it did not recognize how massive the smartphone revolution would be. It seemed reluctant to follow after the Apple and Android advancements, perhaps thinking that its distinctive style would continue to set it apart, especially for business users. But even that strategy has failed as BlackBerry has continued to lose corporate clients, including Home Depot (NYSE:HD) and Halliburton (NYSE:HAL). BlackBerry seems to be reluctant to step off first base in order to get to second. The dismal market reception of the last BlackBerry version and the company’s inability to overcome inertia have caused its market value to drop from $8 billion to $3 billion in the last three months. I fear that, for shareholders, this is not just a failure to have a captivating product, it is evidence of a lack of vision at the highest level.
Nonetheless, Mr. Watsa seems to be demonstrating a much more enthusiastic perspective regarding the potential for the company. He has clearly stated that “Fairfax Financial has no current intention of selling its shares.” He added that “I continue to be a strong supporter of the company, the board and management as they move forward during this process.” It is fair to say that no other major competitor would have an interest in acquiring BlackBerry. Those competitors have already proven their ability to beat BlackBerry on the street. Fairfax Financial may be BlackBerry’s only chance for survival and avoiding a slow and painful death.
