Blackberry Co-Founder Abandons Takeover Bid

by Matt Klassen on December 27, 2013

Two months ago company co-founder Mike Lazaridis and partner Douglas Fregin embarked on an ambitious journey to purchase the Blackberry in an attempt to save the company from the mobile scrap heap, one that would have seen them build on their combined eight (8) percent stake in the firm. That plan now lies in ruins.

According to a report in The Wall Street Journal, Lazaridis indicated in a filing with the Securities and Exchange Commission that he has not only abandoned his ill-advised bid for the takeover of the company, but he has reduced his stake in Blackberry as well to less than five (5) percent.

Whether this speaks to Lazaridis’ tacit admission that Blackberry is doomed or simply his displeasure with CEO John Chen’s new vision for the company’s future remains unclear, but nevertheless such a move still speaks volumes to Lazaridis’ apparent lack of confidence in his once great mobile creation.

It was back in October that Lazaridis and Fregin initially considered purchasing the company, a time when the bid from the Fairfax consortium sat in limbo, before Chen had been adopted to save the company, and before the swath of layoffs that gutted the company’s executive core. In fact it seemed Blackberry’s fate was unavoidable, with industry sharks circling, interested in picking apart what little value theWaterlooCompany had left.

But times have changed. Under the auspices of a new leadership team and an infusion of $1 billion the company has been revitalized (somewhat), changing its tack from a mobile handset vendor towards becoming a data and device management firm for the enterprise sector. Further, not willing to give up its smartphone brand, the company recently struck a deal with mobile manufacturing behemoth Foxconn to continue creating and designing Blackberry branded phones for emerging global markets. It may not look like the Blackberry of old, but lets face it, it was the company’s only choice.

It is within this context that we have to consider Lazaridis’ actions, ones that see the company co-founder reducing his role in the company when only two months ago he was seriously considering going all-in.

As I see it, there are two ways to see Lazaridis’ withdrawal: First, the company co-founder has realized that Chen has instituted a sweeping changing of the guard, replacing or eliminating almost every top level executive position. Being part of that old guard, Lazaridis has recognized, however difficult it was, that he was part of the reason Blackberry is in this mess, and thus humbly stepped back when it became clear his desperate actions to save the firm were no longer needed.

Second, we can see Lazaridis’ withdrawal as tacit disapproval of the direction his beloved company is heading. Consider that under Lazaridis’ watch Blackberry grew to become a mobile industry behemoth, it wouldn’t surprise me if he was still stuck in the mindset that he could return the company to its faded glory days. With such thinking, it would be incredibly frustrating to see the company gutted and its core focus change from producing cutting edge mobile devices to adopting a tertiary support role in the enterprise sector. He wouldn’t be the first founder to settle for nothing but victory or death, unwilling to compromise his vision, even if it meant the end of the dream.

Regardless of Lazaridis’ motivations for withdrawing his bid and reducing his stake in the firm, this is nothing but an unmitigated positive for Blackberry, as it’s going to take radical new thinking to keep this company afloat, not a co-founder pining over what used to be.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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