Author Topic: John Chen's simple plan to save BlackBerry  (Read 8989 times)

ourkid8

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Re: John Chen's simple plan to save BlackBerry
« Reply #10 on: March 09, 2014, 08:17:18 AM »
Mr. Watsa also praised Tom Ward of Sandridge.   In regards to ethics and operational execution, he was an absolute disaster.  Even during the proxy battles, Fairfax openly supported TW which was a huge mistake (he destroyed billions of dollars in shareholder value) considering how strong the current management is in comparison and the amount of work that was required to turn around this company.  IMO, Mr. Watsa lacks good judgment in character and he will continue to support and have full faith in the jockey until the end.  This is totally different from Mr. Buffet who expects high quality management with good judgment or he would typically avoid the investment.

Tks,
S

Am optimistic about the positive changes since John Chen has come on board and am a fan of Watsa's intellect, insight and deep value approach. However, am troubled by Watsa's opinions on management for this company. When he first bought in, he made a point of stating how good Lazardis and Balsille were and strong management was a major reason for him to buy in.  When that fell apart, he was confident that Thorsten Heins was the man and spoke highly of him. Now similar words about Chen with no explanations as to why his previous choices did not work out.
A certain lack of clarity in the process.


longinvestor

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Re: John Chen's simple plan to save BlackBerry
« Reply #11 on: March 11, 2014, 05:32:42 AM »
Mr. Watsa also praised Tom Ward of Sandridge.   In regards to ethics and operational execution, he was an absolute disaster.  Even during the proxy battles, Fairfax openly supported TW which was a huge mistake (he destroyed billions of dollars in shareholder value) considering how strong the current management is in comparison and the amount of work that was required to turn around this company.  IMO, Mr. Watsa lacks good judgment in character and he will continue to support and have full faith in the jockey until the end.  This is totally different from Mr. Buffet who expects high quality management with good judgment or he would typically avoid the investment.

Tks,
S

Am optimistic about the positive changes since John Chen has come on board and am a fan of Watsa's intellect, insight and deep value approach. However, am troubled by Watsa's opinions on management for this company. When he first bought in, he made a point of stating how good Lazardis and Balsille were and strong management was a major reason for him to buy in.  When that fell apart, he was confident that Thorsten Heins was the man and spoke highly of him. Now similar words about Chen with no explanations as to why his previous choices did not work out.
A certain lack of clarity in the process.
+1
With FFH wanting to go the BRK way of owning operating companies, taking on more and more turnarounds is a sure recipe for disaster. WEB avoids 10 foot hurdles, like the plague. PW finds himself facing multiple such hurdles. This has to do with businesses coming to BRK to get bought. WEB has the right to say no and most of the time he does. FFH's foray into wholly owned businesses is rather unimpressive and leaves one scratching heads.
« Last Edit: March 11, 2014, 05:42:52 AM by longinvestor »

Morgan

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Re: John Chen's simple plan to save BlackBerry
« Reply #12 on: March 11, 2014, 06:55:11 AM »
Mr. Watsa also praised Tom Ward of Sandridge.   In regards to ethics and operational execution, he was an absolute disaster.  Even during the proxy battles, Fairfax openly supported TW which was a huge mistake (he destroyed billions of dollars in shareholder value) considering how strong the current management is in comparison and the amount of work that was required to turn around this company.  IMO, Mr. Watsa lacks good judgment in character and he will continue to support and have full faith in the jockey until the end.  This is totally different from Mr. Buffet who expects high quality management with good judgment or he would typically avoid the investment.

Tks,
S
With FFH wanting to go the BRK way of owning operating companies, taking on more and more turnarounds is a sure recipe for disaster. WEB avoids 10 foot hurdles, like the plague. PW finds himself facing multiple such hurdles. This has to do with businesses coming to BRK to get bought. WEB has the right to say no and most of the time he does. FFH's foray into wholly owned businesses is rather unimpressive and leaves one scratching heads.
This is an excellent point. There is a small, but drastic difference in building a collection of companies that have come from turn arounds compared to Buffetts way of getting excellent companies to begin with. In the end both investors have a group of compnies, but Buffetts are more profitable and for longer. Sometimes sitting on your hands and doing nothing really is best.   

ourkid8

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Re: John Chen's simple plan to save BlackBerry
« Reply #13 on: March 11, 2014, 01:57:59 PM »
@Long investor: in general I do agree with your statement but the team seems to have started to correct themselves.  Prime restaurants IMO was a poor acquisition especially owning 100% of a tier 2 restaurant business in Canada.  The team corrected their mistake and merged it with CARA while taking a 49% stake in the combined entity.  They also have brought in strong management to help run the company, great move!!! The synergies from merging these two companies is huge and will payoff in the years to come.

The keg, william Ashley and thomas cook;  I love these acquisitions.  I know they were not cheap as they have a huge runway of growth ahead of them and each have strong competitive advantages.

However, I do question the others such as ridley, sporting life and kitchen stuff plus which do not have a strong competitive advantage...

Thanks,
S

"FFH's foray into wholly owned businesses is rather unimpressive and leaves one scratching heads."
« Last Edit: March 12, 2014, 06:03:25 AM by ourkid8 »

moody202

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Re: John Chen's simple plan to save BlackBerry
« Reply #14 on: March 16, 2014, 12:44:48 PM »
Like Blackberry, a few years ago The Brick was seen to be in its death throes and many thought the company was down for the count. Fairfax stepped in with financing, appointed Bill Gregson as CEO, made some major changes and had The Brick back on its feet within a couple of years.

I have every confidence, despite what many here may think, that John Chen is a key step in the rescue and reformation of Blackberry.


I hope you are ultimately right and RIM turns things around, but I would suggest that the Brick and RIM ran into drastically different problems.

In the case of the Brick, their business model is to sell crappy furniture to middle and lower income Canadians who are financially strapped and mathematically challenged.  During the period that I followed the Brick, they basically broke even on the furniture, but they made decent profit from financing and extended warrantees.  The Brick ran into trouble due to the financial crisis.  Their market was sound, and their business model was sound (even if it is slightly off-putting), but they hit an air-pocket for a couple of years when we were slammed by the Great Recession.

Blackberry is a different beast.  At an industry level, people are buying as many smartphones as they ever have.  However, consumers have collectively decided that they hate Blackberry's products and have switched to devices of other flavours.  This is not just a temporary market disruption caused by the financial crisis.  This is a broad-based  consumer rejection of Blackberry's products.  In my opinion, fixing Blackberry's problems will be much more difficult than the Brick, because Chen cannot simply sit tight and wait until the economy turns around and people once again start buying crappy furniture on credit.  No, if Chen fixes Blackberry, it's because he'll have reoriented the products in a way that consumers appreciate.


SJ

Great points SJ. However, if you hear and read John Chen, he is not banking on a turnaround in consumer business. His focus seems to be on making BBM the secure messenger of choice for enterprises, making the Blackberry platform a viable mobile device management platform in enterprises (compete against Airwatch and few others) and making QMX a viable platform for connected cars and in-car entertainment. The sense I got was Chen's believes they have already lost the consumer market and no point continuing to throw good money after bad in this segment!
Many shall be revived that now are fallen, and many fall that are now in honor.