Shares in BlackBerry collapsed to their lowest level in a decade after the smartphone maker abandoned hopes of finding a buyer and drew up a radical new investment scheme instead.
The ailing company had planned to sell itself to its biggest shareholder, Canada's Fairfax Financial Holdings, but the prospect of a rescue deal receded as Fairfax struggled to raise the funds needed to support its $US9-a-share bid.
BlackBerry has now pegged its survival hopes on raising $US1 billion from institutional investors, including Fairfax, through a private placement of convertible debentures. Fairfax will invest up to $US250 million.
The smartphone maker will also replace its chief executive, Thorsten Heins, who spent two years trying to revive the company before admitting defeat and trying to find a buyer. He will be replaced on an interim basis by John Chen, the former head of software firm Sybase, who is also joining BlackBerry's board as executive chair.
Mr Chen's appointment was seen as a signal that BlackBerry would give up on its handset business and focus on providing secure software for businesses - one of the company's strengths and the area where Mr Chen has most experience. However, he said he had no intention of shutting down BlackBerry's devices unit.
"I know we have enough ingredients to build a long-term sustainable business," he said, adding he would shake up management with a slew of internal promotions and new appointments. Shares in BlackBerry tumbled to as low as $US6.40 after the Nasdaq stock exchange opened in New York - their lowest price in a decade. They recovered slightly, but were still down more 14 per cent.
BlackBerry's $US1 billion investment plan follows a tumultuous period for the company.
The business, founded as Research In Motion in 1984, used to account for more than half of the smartphone market, thanks to its robust devices with their "qwerty" keyboards. However, it was late in introducing touchscreen mobiles, and its market share had slumped to just 1 per cent in the third quarter amid intensifying competition from Apple and Samsung.
BlackBerry rebuffed offers of partnerships with technology giants such as IBM and Microsoft in the hopes that it could effect a successful turnaround, but Mr Heins finally raised the white flag and put the business up for sale in August.
A month later, the company chalked up losses of $US965 million and announced it was laying off 4500 staff - nearly 40 per cent of its global workforce.
Lenovo, the Chinese technology giant, and Cerberus, an investment firm backed by two BlackBerry founders, both considered buying all or parts of Blackberry. According to reports, Facebook was also interested but did not proceed with an offer.