BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) co-founder Mika Lazaridis has dropped his plan to acquire the company through a joint bid with a fellow co-founder, says a report from the Wall Street Journal. According to a filing with the Securities and Exchange Commission, Lazaridis has reduced his stake in BlackBerry to 4.99%.
Earlier in October, Lazaridis and co-founder Douglas Fregin together held an 8% stake in the company, and wished to purchase the company. Both Lazaridis and Fregin terminated the agreement with Goldman Sachs Group Inc and Centerview partners LLC to examine the options for a possible deal. Fregin owns 2.3% of outstanding shares.
The new management at the Canadian smartphone maker is trying to turn around the company. BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has been in the red throughout this year, lagging behind its rivals owing to the failure of its two new smartphones. Additionally, the company has suffered the loss of $4.4 billion in the most recent quarter. Since the start of fiscal 2013, BlackBerry has lost 35% of value this year.
In the recent quarter, revenue declined 56% to $1.19 billion, which was below the average estimate of $1.59 billion. The Canadian smartphone maker recorded a loss of 67 cents from continuing operations, whereas analysts expected a loss of 46 cents.
Last month, Fairfax Financial Holdings Ltd failed to acquire BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) for the set amount of $4.7 billion. BlackBerry was seeking a strategic alternative, but settled down to raise $1 billion in convertible debt. After the whole Fairfax debacle, the Canadian company named John Chen, former Sybase Inc chief as chairman and interim CEO of BlackBerry. The influx of $1 billion gave some time to the company and its CEO to recover from its current situation.
Foxconn gives a breather to the stock
However, last week a deal with Foxconn gave a much-needed surge to BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). The shares added 16% after the announcement.
The Canadian firm entered into a five year deal with Foxconn Technology Group to manufacture its devices. Through the partnership, BlackBerry is expected to save on costs and do away with inventory gluts, which have been troubling the company recently.
Under the agreement, Foxconn would design phones for BlackBerry at its manufacturing facility in Indonesia and Mexico. Intellectual property rights would be held by BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) and quality assurance will be provided by Foxconn, which is also a supplier to Apple Inc. (NASDAQ:AAPL).