In 2009, Blackberry dominated 47% of the US market. Today, it has barely over 2% of the US market. Its stock market value has fallen from $55 billion to less than 10% of that number, $4.6 billion.
Last Friday, Blackberry announced an almost $1 billion loss for the quarter, and its plan to fire 4,500 workers. Three days later, an offer was made by Blackberry’s largest shareholder to buy-out the company and take it private. Fairfax Financial Holdings Ltd., a 10% shareholder, offered to buy the stock for $9/share. This included a premium over the trading of $8.24/share prior to the announcement.
One month ago, Blackberry formed a special committee to look into strategic options for the company. The committee has approved the Letter of Intent with Fairfax, which states that Fairfax can buy the remaining stock for $9/share and take the company private. This deal is subject to many exceptions, the most important of which is completing due diligence. Until due diligence is complete (expected November 4th), Blackberry is free to accept other bids to purchase the company.
Should the deal go through, Blackberry will no longer be listed on the US markets and it will not have to publicly disclose its financial statements. If Blackberry goes private it will be the second large tech company to do so this year; Dell was bought out by its founder in early September.