Skip to main content
The Globe and Mail
Get full access to globeandmail.com
Support quality journalism
Just $1.99 per week for the first 24weeks
Just $1.99 per week for the first 24weeks
The Globe and Mail
Support quality journalism
Get full access to globeandmail.com
Globe and Mail website displayed on various devices
Just$1.99
per week
for the first 24weeks

var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){console.log("scroll");var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))}pencilInit(".js-sub-pencil",!1);

A BlackBerry logo is seen at the smartphone maker’s Waterloo campus on Sept. 23, 2013.

Mark Blinch/Reuters

BlackBerry Ltd. investors should get a clearer picture of the prospects for the once-mighty smartphone maker and what new executive chairman and interim CEO John Chen plans to do to rescue it.

So far we've heard little from Mr. Chen, the former CEO of database software firm Sybase, other than a handful of quotes last month when the company announced his hiring and an open letter to customers that suggested little change in course from predecessor Thorsten Heins. We'll get much more when the company releases third-quarter results on Friday.

Few expect a pretty picture: Analysts are calling, on average, for a loss of 41 cents (U.S.) per share for the quarter, compared to a 2-cent profit in the same period a year earlier. Revenue is expected to come in at $1.59-billion, down 42 per cent year over year.

Story continues below advertisement

BlackBerry has fallen short of analyst expectations in five of the past eight quarters. "The quarter is going to be a disaster," Kris Thompson of National Bank Financial said recently.

That sentiment is reflected in a bleak report last week from Citi analyst Ehud Gelblum, who has a "sell" rating and $4 share price target on the stock. He sees the company challenged in every business in which it competes, and figures that just shutting down would cost the company more than its cash, even after a $1-billion convertible debenture refinancing completed last month. Its best option, he thinks, would be to sell the company in parts.

So there are three things to watch for. First, how badly is BlackBerry's business deteriorating, and how fast is it burning through its cash? The company had $2.6-billion as of the end of the last quarter but Mr. Chen has said cash will decline for the next few quarters. The financing was supposed to help, as will the $500-million-plus it will get from a tax refund in the new year, plus the proceeds from the planned sale of much of its real estate. Its services business continues to generate solid revenues, but it is in decline, as are smartphone sales.

Second, of course, is Mr. Chen's turnaround plan. He hasn't had much time to put one together but the market is expecting something concrete, realistic and positive. It will be hard to assess its prospects for months, but expect critics to have their arrows at the ready.

Part of that plan could be another executive shakeup. Citing people familiar with the matter, Dow Jones reported Sunday that two executives will soon be departing: Rick Costanzo, executive vice-president in charge of global sales, and Chris Wormald, who was in charge of mergers and acquisitions strategy.

Finally, as part of the financing, BlackBerry's largest shareholder Fairfax Financial Holdings, which abandoned a takeover bid in early November, got an option to buy an extra $250-million worth of debentures, doubling its initial investment.

Fairfax didn't take the option by the end of the 30-day deadline after closing, so BlackBerry extended it by one month to allow Fairfax to assess this Friday's news before making a final decision.

Story continues below advertisement

Deciding to upsize its investment would clearly show that at least one investor is buying into Mr. Chen's plan – the shareholder who brought him to the company in the first place.

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies