Fairfax Financial Holdings Ltd. has officially divested its entire stake in BlackBerry Ltd., marking the end of a once-promising 16-year partnership that ultimately resulted in significant financial losses. This decision comes at a time when BlackBerry’s automotive software business is gaining renewed interest from investors, highlighting the contrasting fortunes of the two companies.
Fairfax’s Departure from BlackBerry
In a recent filing with U.S. regulators, Toronto-based Fairfax disclosed it no longer holds any shares in BlackBerry, a significant shift from its former role as one of the tech firm’s largest shareholders. Earlier in May, Fairfax’s holdings stood at 26.26 million shares, a decline from 35.4 million shares reported in September last year. For the majority of its investment, Fairfax maintained 46.7 million shares, but the firm began selling off its stake after March 31, 2025. Despite being a prominent player in BlackBerry’s investor landscape with an 8 per cent stake as of early 2025, Fairfax’s CEO, Prem Watsa, chose not to comment on the exit.
A Long-Term Investment with Diminishing Returns
Fairfax’s engagement with BlackBerry began in 2010 when the company was grappling with fierce competition from Apple and Android devices. The firm initially saw potential in BlackBerry, believing it could rebound from its struggles. Over the years, Fairfax built its stake, eventually owning as much as 9.9 per cent of the company by mid-2013. However, despite the optimism, BlackBerry’s performance remained lacklustre, marked by delayed product launches and a series of strategic missteps.
This culminated in Fairfax’s decision to shift its focus away from BlackBerry, which had become a significant financial burden. Watsa acknowledged the poor investment in his shareholder letters, stating that the firm had lost approximately US$288.5 million based on the timing of its stock sales. The losses are compounded by an earlier US$36 million lost on a sale of shares in 2014, leading to an overall deficit exceeding US$124.5 million on its BlackBerry investments.
Opportunity Cost and Lessons Learned
Watsa has openly expressed regret over the BlackBerry investment, labelling it as “another horrendous investment” in his communications with shareholders. He pointedly noted the lost opportunities had Fairfax invested in high-performing tech stocks such as the FAANG companies—Facebook, Amazon, Apple, Netflix, and Google. Had Fairfax placed the US$882 million it invested in BlackBerry into these stocks, the value could have increased by as much as 27 times over the same period.
Despite the struggles with BlackBerry, Fairfax continues to thrive, boasting total assets of US$109.1 billion as of June 30, 2023. The company’s own stock has enjoyed a remarkable 311 per cent increase over the last five years, underscoring the contrasting trajectories of the two firms.
The Current Landscape for BlackBerry
As BlackBerry undergoes a transformation under new leadership, the company is now focusing on its cybersecurity and embedded software divisions. Recent reports indicate that BlackBerry has achieved its fifth consecutive profitable quarter, aided by growing demand for its cybersecurity solutions, driven by geopolitical factors. The company’s QNX division, which provides operating systems for over 275 million vehicles, has also shown promising revenue growth, indicating a potential resurgence.
Interestingly, Fairfax’s divestment comes alongside similar moves from other major shareholders, such as British hedge fund Fifthdelta Ltd., which sold all its BlackBerry shares during the second quarter. Regulatory filings show that BlackRock Inc. also reduced its stake significantly, reflecting a broader trend among investors.
Why it Matters
The exit of Fairfax Financial from BlackBerry underscores the precarious nature of tech investments, particularly in a rapidly evolving market. Watsa’s reflections on the investment serve as a stark reminder of the risks associated with backing companies in decline. As BlackBerry seeks to redefine itself in the tech landscape, this shift in investor sentiment highlights the importance of strategic foresight and adaptability in the face of changing market dynamics. For both investors and companies, the lessons learned from this relationship will resonate for years to come.