BlackBerry shares nosedived on news that co-founder Mike Lazaridis is no longer interested in making a joint bid to buy the struggling Canadian smartphone maker.
The company's share price has fallen by around 36 percent from the beginning of 2013 and currently, it is struggling to suvive in the highly competitive smartphone industry.
In 2013, BlackBerry launched the Z10 all-touch smartphone running on the company's latest BlackBerry 10 OS. The company also launched a few QWERTY handsets but failed to attract customers. Recently, BlackBerry announced its financial results for Q3 of fiscal 2014 ended November 30, posting a loss of $4.4 billion in the quarter. The company has also written off $1.6 billion as unsold BlackBerry 10 devices.
However, the company said it has signed a deal with contract manufacturer Foxconn to make its future handsets for emerging markets. BlackBerry CEO John Chen also made morale-boosting statements, saying the company would now focus more on software business, and less on hardware business, which had made the company lose millions of dollars in recent years. Investors liked what Chen said, sending BlackBerry stock surging.
Taking advantage of the recent stock surge, Lazaridis sold 3.5 million BlackBerry shares, valued at about $27.4 million on Monday (Dec. 23) and Tuesday (Dec. 24), according to a regulatory filing. Lazaridis did not reveal any reason for selling the shares, but market analysts said he made a wise move. "It's smart for him to sell now, while it's still a liquid stock," said Daniel Ernst, an analyst at Hudson Square Research.
Previously, Lazaridis along with Douglas E. Fregin, the company's other founder, said they were planning to form an investment group to buy BlackBerry. However, in November this year, BlackBerry received investments of $1 billion and dumped the idea of selling itself.
Now, the action of offloading the shares not only indicates that Lazaridis is no longer interested in buying BlakBerry, but also it hints that he may be losing interest in the development of the company. Anyways, his action did not go down well with the investors, whose low morale reflected in the sharp drop of shares on the exchange - on Thursday, December 26, the shares opened at $7.54 but sank by over 8 percent to close down at $7.06 on the Nasdaq.
On Friday, however, the shares staged recovery, closing 3.40 percent up at $7.30.
