BlackBerry appeals to customers to stay with smartphone maker as it restructures
TORONTO — BlackBerry (TSX:BB) is appealing to its customers to stay with the troubled smartphone maker as it restructures.
In an open letter released Monday afternoon on Twitter, BlackBerry tells its “customers, partners and fans” that they can continue to count on the Waterloo, Ont.-based company.
But it says BlackBerry has substantial cash on hand, a balance sheet that is debt free, and is restructuring with a goal to cut expenses by 50 per cent.
It also says BlackBerry doesn’t underestimate the situation it faces, and is making “difficult changes” — such as a 40 per cent reduction of its global workforce — to strengthen the company.
The open letter also touts BlackBerry’s security measures and notes its system also works with Apple iOS and Android devices.
“We are bringing the most engaging mobile messaging platform to all, with our BBM launch for Android and iPhone,” the letter stated. “There are already around six million customers pre-registered to be notified of our roll out.”
And the letter also stressed the company’s BlackBerry 10 devices, saying BlackBerry continues “to offer the best mobile typing experience — no ifs, ands or buts about it.”
BlackBerry has struggled this year as sales of its latest smartphones failed to catch fire, and some carriers decided not to sell BlackBerry’s new Z30 smartphone.
Rogers Communications reversed its decision not to sell the Z30 last week following a backlash from customers on message boards and Twitter.
Fairfax Financial (TSX:FFH), BlackBerry’s largest shareholder, has made a conditional takeover bid worth US$9 per share and values the company at US$4.7 billion.
The Fairfax consortium is expected to complete its due diligence by Nov. 4. Until then, BlackBerry is allowed to actively solicit and evaluate rival offers.
BlackBerry co-founders Mike Lazaridis and Douglas Fregin have said they are looking at making a potential takeover bid.
According to documents filed with the U.S. Securities and Exchange Commission last week, the two are “interested in pursuing a joint bid” with “the goal of stabilizing and ultimately reinventing the company.”
Together, Lazaridis and Fregin own roughly an eight per cent stake in BlackBerry, while Fairfax holds about 10 per cent.
Meanwhile, a class-action lawsuit was filed last Thursday at the Ontario Superior Court on behalf of all Canadian BlackBerry shareholders.
In a statement, the Merchant Law Group LLP said the suit was on behalf of shareholders who purchased the stock between Sept. 27, 2012 and Sept. 20, 2013.
The lawsuit alleges the company and its senior management “knowingly or negligently misrepresented” that the BlackBerry 10 smartphones had been well received by customers and in a “strong financial position,” according to a news release.
The representative plaintiff is alleged to have lost $55,000 after buying BlackBerry shares in the last year.
None of the allegations have been proven in court.