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BlackBerry shows CEO Heins the door, abandons Fairfax buyout

BlackBerry on Monday moved to oust CEO Thorsten Heins while jettisoning a buyout by Fairfax Financial in one fell swoop, as the company struggled to stanch both a market share and stock price in free fall.

Just months after a make-or-break launch of a new device fell flat, the embattled smartphone maker—whose attempts at reinvention have done little to restore investor confidence—booted Heins and much of the company's leadership team. In a statement, BlackBerry said that rather than be bought outright by Fairfax, the insurance company and a cohort of "other institutional investors" would invest $1 billion in the company through convertible securities. The deal will be complete within the next two weeks, it added.

BlackBerry CEO Thorsten Heins.
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BlackBerry CEO Thorsten Heins.

"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors," said Barbara Stymiest, BlackBerry's board chairwoman.

"This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position," she added. "Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs."

(Read more: Sink or Swim Time for RIM as BlackBerry 10 Launch Looms)

Yet the firing of Heins, who first ascended to BlackBerry's top job in January 2012 and will step down at the close of the deal, to be replaced by interim chair John Chen, came as a surprise to many observers. The German-Canadian executive was a six-year veteran of the company, eventually becoming BlackBerry's most public cheerleader. He relentlessly promoted the BlackBerry 10 as a lifeline to the company reviving its fortunes.

"This feels a lot like a desperation [move]," CNBC's Jim Cramer said.

In September, BlackBerry agreed in principle to be acquired by Fairfax, a Canadian insurance company, for $9 a share in a deal worth $4.7 billion in U.S. dollars. Yet since then, several suitors have come forward with alternative bids.

(Read more: Here's why BlackBerry deal may be a fake out)


The latest chapter in BlackBerry's history is a stunning turnabout for a company that pioneered the smartphone, before getting displaced by current giants Apple and Samsung.

Since the iPhone and Galaxy have taken hold of the public's imagination, they have become the gold standard of mobile devices, and left BlackBerry in the dust. According to ABI Research, BlackBerry's global market share extended its death spiral in the latest quarter, dwindling to less than 2 percent of all new smartphone shipments.

The company has lost about $79 billion in market cap value since the stock hit a record of $148 in June 2008. Its market cap is now only $4 billion, a mere fraction of the $83.6 billion it enjoyed back in its heyday and a 95 percent drop in five years.

More recently BlackBerry announced a plan to lay off 4,500 workers, in the wake of being forced to swallow a nearly $1 billion charge against unsold BlackBerry 10 devices.

Early indications show investors giving the move the thumbs-down on the latest move: In trading on the Nasdaq stock market, the company's shares plummeted by nearly 17 percent, pinned under $7.

By CNBC's Javier David. Giovanny Moreano contributed to this report.

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