BlackBerry intends to keep making smartphones, and incoming CEO John Chen thinks it will take him six quarters to turn the company around, report Euan Rocha and Jim Finkle for Reuters. Now that Prem Watsa’s buyout plans have officially fallen through, it seems the company has decided to return to Plan A – go down fighting.

BlackBerry

“I know we have enough ingredients to build a long-term sustainable business,” Chen told Reuters. “I have done this before and seen the same movie before.”

Watsa’s new plan is to raise $1 billion

Chen was named executive chairman and interim CEO on Monday after it was officially announced that Watsa’s Fairfax Financial Holdings Ltd (TSE:FFH)’s would not go through with its original $9 per share buyout (as many analysts predicted). Watsa’s new plan is to raise $1 billion by selling convertible debentures, which are similar to convertible bonds except that they are an unsecured form of debt and will be repaid after other debts in case of bankruptcy. Fairfax Financial Holdings Ltd (TSE:FFH) will buy $250 million worth of the debentures, and the company is looking for investors willing to buy the rest. Presumably Watsa has already been quietly shopping the idea around, but providing unsecured debt to a company no one really expects to survive is a tough sell.

Chen was brought in at least partly because of his successful experience at Sybase in the late 90s, turning the company around after it turned out that Sybase’s Japanese division had misreported profits, resulting in a class action lawsuit and the firing of five executives. But BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s problems have nothing to do with disreputable execs or misstated earnings and everything to do with being pushed out of the marketplace by competitors who better understand what people want.

BlackBerry’s stock price is currently down

Even if the debenture sale goes well and BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has plenty of capital to fund its next move, it has to change the perception that it is a dying company among both developers and consumers. Simply carrying on with the same goals and same intended customer base will lead to the same results – heavy losses and talk of bankruptcy. If Chen is serious about making BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) profitable again, he’ll need to do something drastic, but it’s not even clear what that would be.

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s stock price is currently down to $6.50 from a recent high of $8.32, and shows no sign of stabilizing.