Watsa tells Fairfax shareholders: Chen right man for the job at BlackBerry | iNFOnews | Thompson-Okanagan's News Source

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Watsa tells Fairfax shareholders: Chen right man for the job at BlackBerry

TORONTO - Financier Prem Watsa says he's happy with the progress BlackBerry has made in turning around its business.

Watsa, chairman and CEO of investment firm Fairfax Financial (TSX:FFH), said the ailing smartphone maker's new leader, John Chen, has the right experience to make the company profitable again.

The firm headed a consortium of investors who injected US$1 billion into BlackBerry last fall, after a failed attempt by Watsa to raise enough money to take the smartphone company private.

"John, in five months, has done so many changes. We're very impressed," Watsa told investors at the Fairfax annual meeting in Toronto on Wednesday.

"He's hit the road running," he added.

Chen's performance, and turnaround of BlackBerry, has been a major focus for Fairfax, which has a 10.5 per cent equity stake in the Waterloo, Ont.-based company.

While Chen has been praised for leading the turnaround of enterprise software developer Sybase, Watsa said his stellar reputation extends beyond saving companies who are in dire straits.

He said Chen is a good leader, and pointed to several executives who left their jobs at Sybase to join Chen at BlackBerry as a sign of his skills.

Fairfax's investment in BlackBerry has raised some eyebrows because many analysts believe the smartphone company has lost most of its customer base and failed to launch new devices good enough to rebuild its reputation as a technology leader.

BlackBerry shares have suffered a major drop since its heyday, hovering around $10 over the past year, compared to its all-time high of $149.90 reached in June 2008. On the TSX, BlackBerry shares traded down four cents to $8.66 on Wednesday.

Watsa said he believes BlackBerry investors have overreacted.

"When stocks prices come down the market — very short term — predicts bankruptcy, and when it goes up predicts years of fantastic growth," he said.

"The truth is always in between."

Watsa also took a moment to criticize technology stocks, which have come under pressure on Wall Street in recent trading sessions on concerns they're overvalued in an uncertain global economy.

"There's nothing underlying the value of these companies," he told investors while referencing a chart that included major U.S. tech companies like Facebook, Twitter and Netflix.

"The last time this happened was in the dot-com era. I can tell you this is going to end in tears, because it always has."

News from © The Canadian Press, 2014
The Canadian Press

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