Blackberry shares plunge after sell-off plan abandoned

Shares in struggling smartphone maker
Blackberry have fallen 16% after it
announced it had abandoned a plan to sell
itself to its biggest shareholder, Fairfax
Financial Holdings.
Instead, it intends to raise $1bn (£627m) in
fresh financing.
Chief executive Thorsten Heins will step down
and former Sybase chief executive John Chen
will serve as interim chief executive.
Last month, Blackberry reported a second-
quarter net loss of $965m.
Those losses were blamed on poor sales of its
new smartphone, the Z10.
'Substantial cash'
Fairfax was planning to lead a consortium of
firms in a takeover of Blackberry worth
$4.7bn.
But that plan, announced last month, has
fallen through.
Last week, Reuters reported that Fairfax was
struggling to raise the financing needed for the
deal.
Instead, Fairfax, which owns a 10% stake in
Blackberry, is contributing $250m to the new
fund-raising.
"This financing provides an immediate cash
injection on terms favourable to Blackberry,
enhancing our substantial cash position," said
Barbara Stymiest, chair of Blackberry's board
of directors.
In September, the company announced a plan
to cut 4,500 jobs, or 40% of its workforce, to
reverse giant losses.
The interim chief executive, John Chen,
acknowledged the challenge ahead: "Blackberry
is an iconic brand with enormous potential -
but it's going to take time, discipline and
tough decisions to reclaim our success."
Some analysts remain sceptical about the
firm's prospects.
"Now we're back to the downward spiral," said
BGC Partners analyst Colin Gillis.
"They've got $1bn more cash that buys them
time. The drumbeat of negativity is likely to
continue."