In a significant shift for both companies, Fairfax Financial Holdings Ltd. has divested its entire stake in BlackBerry Ltd., concluding a tumultuous 16-year partnership that ultimately resulted in substantial financial losses. This decision comes as BlackBerry’s automotive software division begins to attract renewed interest from investors, highlighting the contrasting trajectories of the two firms.
Fairfax’s Withdrawal from BlackBerry Holdings
Fairfax Financial, headquartered in Toronto, disclosed on Friday through a U.S. regulatory filing that it no longer possesses any shares in BlackBerry. The investment firm previously held 26.26 million shares as of early May, a decrease from 35.4 million shares reported in September 2024. Fairfax had maintained a significant stake, peaking at 46.7 million shares over an eleven-year period, but began offloading its holdings following March 31, 2025. Prem Watsa, the CEO of Fairfax, opted not to provide additional comments regarding the investment’s outcome.
Having been one of BlackBerry’s most influential shareholders, Fairfax once controlled 8% of the company’s stock as of early 2025. The firm had the option to convert its debt into additional shares, which could have potentially elevated its ownership to over 16%. However, these rights were never exercised, and Fairfax instead chose to refinance its debt multiple times until it was fully repaid by 2024.
Financial Implications of the Investment
Throughout its tenure with BlackBerry, Fairfax accrued around US$200 million in interest income while holding US$500 million in BlackBerry debentures, as noted by Watsa in his annual letter to shareholders in 2024. However, this figure pales in comparison to the estimated US$882 million invested in BlackBerry stock. Watsa acknowledged in his correspondence that the average cost per share for Fairfax was approximately US$17.16. Since early 2012, BlackBerry’s stock has rarely approached this price point, barring a brief spike driven by speculative trading in 2021.
Given the timing of Fairfax’s divestment, it incurred a minimum loss of US$288.5 million, a conservative estimate based on peak share prices during its holding period. The actual losses could be significantly higher, further compounded by a previous loss of US$36 million when the firm sold 5.2 million shares in 2014 at a notable loss.
Reflecting on the investment, Watsa labelled it “another horrendous investment by your chairman” in a previous letter. He even highlighted the lost opportunity cost, suggesting that had Fairfax invested in tech giants such as Meta, Amazon, Apple, Netflix, and Alphabet—collectively known as FAANG—its returns could have increased exponentially.
A Look Back at BlackBerry’s Journey
Fairfax first ventured into BlackBerry’s stock in 2010, a time when the company faced escalating challenges from competitors like Apple and Google, which were rapidly gaining market share with their innovative smartphones. Despite the company’s declining fortunes, Watsa perceived a potential turnaround. He believed in BlackBerry’s capacity to recover, sharing a vision with co-founder Mike Lazaridis.
Watsa’s commitment deepened as he joined the BlackBerry board in 2012, following an invitation from Lazaridis. By 2013, Fairfax’s ownership had increased to 9.9%, with Watsa expressing optimism over the company’s prospects. However, delays in product releases and a strategic review initiated in 2013 led to Fairfax proposing a buyout of BlackBerry, ultimately resulting in a US$1.25 billion recapitalisation deal.
Despite bringing in turnaround expert John Chen as CEO, BlackBerry struggled to regain its footing. While Watsa praised Chen’s efforts in the beginning, shareholders soon became disillusioned due to declining revenues and high executive compensation packages. Chen’s departure in November 2023 and Watsa’s exit from the board soon after marked the end of an era for Fairfax’s involvement in BlackBerry.
New Leadership and Future Prospects for BlackBerry
Under Chen’s successor, John Giamatteo, BlackBerry has reportedly slashed costs and refinanced its debt, positioning itself for potential growth. The company’s stock has recently reached its highest levels in years, excluding periods of speculative trading, with its cybersecurity division experiencing consistent demand amid ongoing geopolitical tensions. BlackBerry’s QNX division, which powers over 275 million vehicles, reported a significant revenue increase of 26% in the last quarter, suggesting a promising future as it broadens its offerings to various industries.
In recent months, other major shareholders have also reduced their stakes in BlackBerry as the stock price surged, with Fifthdelta Ltd. completely exiting its position by the end of the second quarter. BlackRock Inc. similarly decreased its holdings from 29.6 million shares to 3.3 million.
Why it Matters
The conclusion of Fairfax’s long-standing investment in BlackBerry serves as a stark reminder of the volatile nature of technology investments and the challenges faced by legacy companies in adapting to rapidly changing markets. As BlackBerry pivots towards new opportunities in cybersecurity and automotive software, the lessons learned from Fairfax’s experience highlight the critical importance of strategic foresight and adaptability in the tech sector. Investors and industry analysts alike will be watching closely to see if BlackBerry can sustain its newfound momentum and redefine itself within a competitive landscape.