The last week of business news has been nontop gamestop. If on one occasion you’re living under a rock or just waking up from a coma, here’s a 10-second recap: A group of users on the Reddit forum called / WallStreetBets staged together on a platform Gaya, who is revolting against the specialist of money, placing small bets against struggling companies. Using a commission-free app such as Robinhood, the Reddit Army has stuck a big middle-finger in short-trading hedge funds that are picking up at a handful of downtrodden companies, the most well-known Gametop. In a few days, this army of regular day-traders skyrocketed GameStop’s stock price. The stock, which traded at around $ 10 a share in December, briefly hit $ 483 on Thursday. The stock closed the week at $ 325 per share. GameStop has a market cap of $ 22 billion at that level. A year ago, GameStop had a market cap of about $ 300 million.
But GameStop was not the only company to be blessed with Reddit’s sudden attention. AMC, the national drink (producer of La Crix – ticker symbol “FIZZ”), Bed Bath & Beyond, Fossil, Beyond Meat and Blackberry were all sent on a crazy roller coaster ride.
[I don’t own stock in any of these companies and this article is not advising anyone to buy or sell anything, BUT in my opinion the music is going to stop soon and these companies will all see their share prices crash back down to reality.]
A man who is surely hoping that the music keeps playing and the red attention is not faded?
BlackBerry CEO John Chen
In fact, there is a strong possibility that a group of people reading this article were not Blackberrys yet.
For these young readers:
The iPhone was invented in 2007. In the decade or before the iPhone existed, many people had Blackberry. They were particularly popular for business people as it was actually the first gadget that emailed the phone from viable. Here Andre 3000 is shown holding the BlackBerry at the 35th NAACP Image Awards in 2004:
Here is the creator of CelebrityNetworth (Brian Warner, my photo) at a Playboy mansion party in June 2008, 10 drinks enjoying an amazing chicken nugget and realizing that my BlackBerry was automatically connected to the mansion WiFi network , Which was called “Bannies”. :
Remember being in public without a mask?
Remember going to parties?
Man has changed the world a lot. in any way. Back to BlackBerry
The thing is, BlackBerry was a big thing for a long time. And so, the BlackBerry company was a big deal for a long time.
In 2011, BlackBerry, whose corporate name was actually Research in Motion, generated $ 20 billion in revenue. That translates to $ 4.7 billion in operating income. A year later, BlackBerry had 80 million subscribers.
All Time High, BlackBerry’s parent company Research in Motion (ticker symbol “RIM”) had a market cap north of $ 90 billion, making it the most valuable company in Canada by a kilometer (metric system).
Unfortunately the peak in the decade following 2011 has been significant for RIM, which at some point officially changed its corporate name to BlackBerry Limited, and changed its ticker symbol to “BB”.
In November 2013, the day John Chen was named CEO of BlackBerry, the stock was priced at $ 7. It reached $ 144 only a few years ago.
Under the guidance of Chen, BlackBerry stock is not really thriving. It is mostly flat-lined at $ 7, with some brief spurs being $ 10.
John Chen’s contract
In March 2018, John Chen signed a contract extension, which would keep him as CEO until 2023. The contract allowed John to continue his $ 3 million base salary. It also gave him 5 million shares of BlackBerry, which became in five years (20% vest each year). The stock was trading at $ 12.50 the day the contract was signed. So if the share price never went up, they would eventually be worth $ 62.5 million.
But the contract had a sweetener.
According to a unique clause in the contract, if the Blackberry stock closes above $ 30 in ten days during the five years of the contract, John Chen receives a $ 90 million cash bonus. Stocks do not have to close above $ 30 and stay there for 10 consecutive days, just in a hurry to close above $ 30 in ten days. It can be done once the next week, another time next week, for the second time in a year… it just has to end the day above $ 30 ten time.
Prior to January 27, BlackBerry stock mostly bounced between $ 4 and $ 7 per share.
Here it is interesting:
For some time on Wednesday, January 27, BlackBerry hit $ 28 per share. This eventually closed the day at $ 25 and closed the week at $ 14. But for those brief moments, John Chen was $ 2 away from hitting his first ten $ 30 milestones.
but that’s not all!
The chain has another sweetener in its contract involving the 10-day average share price of BlackBerry. By its contract, the chain could acquire 5 million shares of BlackBerry if the company’s 10-day average hits $ 16 and then $ 20.
Blackberry stock was at a 10-day average price of $ 14 at the end of the week.
If the Reddit army manages to get the Blackberry above $ 30, and keeps it there for ten days, the following will happen for John:
$ 90 million cash bonus
5 million share bonus, which will equal $ 150 million at $ 30
5 million stock options would be worth $ 150 million =
$ 390 million
If I was John Chen, I’d start familiarizing myself with the reddit forums …