Everybody needs a corporate jet when they’re hemorrhaging money, right?
Smartphone maker BlackBerry purchased a large, long-distance-travel corporate jet in July despite the fact that the company is suffering severe losses and is looking for an exit.
Last week, BlackBerry released a preview of its upcoming earnings announcement, and it looks far worse than what we expected. The company reported losses of over $950 million and will have to lay off around 4,500 employees to keep its head above water. This is a huge downturn for the mobile giant that has been attempting to restructure and get its losses under control for some time.
So why buy a corporate jet as few as two months ago when these losses were surmounting? Thankfully, there is some rationale here. As the Wall Street Journal notes, BlackBerry sold off one of its company jets last year in order to make up for those losses.
This left BlackBerry with only two, smaller jets to work with. The company explained yesterday that it had plans to sell off the two jets and instead take on this larger, long-distance one that may have fit the company’s needs better. In light of its recent financials, however, BlackBerry says it will sell off all of its jets, including this July purchase.
BlackBerry founder Mike Lazaridis is reportedly talking to a number of private equity firms to take over the business. In the meantime, the company plans to focus on “prosumers” as opposed to the consumer market, and it will reduce its smartphone offerings from six models to four.
The stock was down a little over five percent at the time of publishing this post, hovering around $8.23 a share.
BBRY data by YCharts