BlackBerry’s New CEO Has Raised the Dead Before. Can He Do It Again?

With its new hire, BlackBerry could be signaling a move away from hardware.

Photo by Joe Raedle/Getty Images

Matthew Yglesias is on vacation.

BlackBerry’s in a bad place. It seems to have been unsuccessful when it pitched itself to Facebook. On Monday, it abandoned a deal to be bought out by Fairfax Financial for $4.7 billion (and its stock dropped from about $8 to about $6.50). BGR says one analyst is recommending that the company consider killing its hardware business altogether. And all of that comes after company’s utter failure to reboot its phone sales.

The current CEO, Thorsten Heins, is getting pushed out—with a $14 million parachute.

But it’s not all bad. Instead of purchasing BlackBerry, Fairfax and others will pump $1 billion into it. Considering the company has $2.3 billion in cash and no debt, they have significant resources to pivot, and commit to it. If you’re wondering why anyone would put $1 billion into a company struggling this badly, it’s precisely because of how valuable the company’s assets are—including that cash, but also a number of patents.

Then again, the company managed to lose $1 billion in just one quarter, months ago.

The man who will lead BlackBerry in this desperate pivot is interim CEO John Chen. Bloomberg is reporting that Chen’s compensation package is “$1 million in base salary and a performance bonus of $2 million,” plus “13 million shares that will vest over the next five years.” That stock would be worth about $85 million.

To give Chen his due, the confidence around him stems from his 12-year revival of Sybase, a software company. According to Bloomberg, he was able to sell Sybase three years ago for “six times its value at the start of his tenure.” A similar increase in valuation could increase the value of his compensation package to half a billion dollars.

Choosing Chen could signal that BlackBerry’s next big step is away from hardware, as mentioned earlier. That’s a good bet considering BlackBerry’s only recent, if dubious, success was its BBM app on iPhone and Android.

So can Chen turn around the company? His compensation package is incredibly weighted toward stocks, so he must think he can. But no matter how great he turns out to be, it will take the market a long time to forget that the company managed to hemorrhage $1 billion in just one quarter on account of what should have been a flagship product. There isn’t much hope unless BlackBerry starts looking fundamentally different—and soon. An app that relies on BlackBerry’s dwindling name cred definitely isn’t enough to accomplish that.

When Chen took over at Sybase, one research firm “predicted a 70% percent probability for ‘Sybase’s death,’” according to the Wall Street Journal. I guess that makes him the right man for the job.