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BlackBerry CEO steps down as company secures $1 billion funding from investors

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BlackBerry 10 stock
BlackBerry 10 stock

Today was always going to be a momentous day for BlackBerry, with a looming deadline for its proposed takeover deal with Fairfax Financial Holdings. As it turns out, the full takeover isn't taking place, but the company is going to receive an investment of $1 billion from Fairfax and a group of other institutional investors as it seeks to steer a new course. That will involve some major reshuffling at board level, starting with CEO Thorsten Heins, who is stepping down to be replaced by interim CEO John S. Chen. In the wake of the news, BlackBerry's already battered stock price has taken yet another blow, falling more than 18.5 percent in pre-market trading.

The Thorsten Heins era is over

Chen, BlackBerry's new interim leader, comes with strong credentials. He most recently played an instrumental role in turning around the fortunes of Sybase, a company that was once in a similarly distressed state to BlackBerry's current plight. His experience in the mobile enterprise business will be an asset and could potentially point to the future direction of the company. John Chen is also taking up the role of Executive Chair of BlackBerry's board, immediately taking on a great deal of both power and responsibility.

Barbara Stymiest, the present Chair, comments in the company's press release to thank Thorsten Heins for his contributions over the past six years and to welcome the incoming CEO, describing Chen as "a distinguished and proven leader in the technology industry." Heins' departure and Chen's appointment together mark the conclusion of BlackBerry's review of strategic alternatives. Prem Watsa, Fairfax's CEO, takes a prominent role as Lead Director and Chair of the Compensation, Nomination and Governance Committee.

Update: In an interview with Reuters, incoming CEO John Chen says that he has no intention of shutting down BlackBerry's handset division, despite its growing losses. "I know we have enough ingredients to build a long-term sustainable business," Chen said, having noted that BlackBerry is still capable of staging a turnaround. "I have done this before and seen the same movie before."

<h2>Read next: Who is John Chen, BlackBerry's new CEO?</h2>