In 2013, BlackBerry was led by Thorsten Heins. The company was in a downward spiral and its revival was banking on the BlackBerry Z10, an all-touch smartphone powered by its new BlackBerry 10, to save it.
Shortly after its release in February 2013, one analyst from Detwiler Fenton & Co. ripped into BlackBerry by claiming to have inside information, noting “returns are now exceeding sales, a phenomenon we have never seen before.” This news sent BlackBerry’s stock to sink 7.8 percent in one day.
BlackBerry denied the report, stating, “This is absolutely false. Our data shows that return rates for BlackBerry Z10 devices both in the U.S. and on a global basis are in line with or better than our expectations and are consistent with return rates for other premium smartphones in the market today.”
Detwiler Fenton & Co.’s insider tip was from James Dunham of Connecticut, a manager at Verizon reseller Wireless Zone, who was providing the brokerage house detailed sales records of BlackBerry’s performance.
Dunham, who was paid $2,000 per month by Detwiler Fenton & Co. as a consultant, was arrested by the FBI in February for selling insider information, and has now been sentenced to five months in prison, and an additional five months of “home confinement”. He must also pay a fine of $76,000 USD.
BlackBerry is now run by CEO John Chen who has positioned the company to focus on a core enterprise market that specializes in security. BlackBerry’s most recent quarterly results showed a loss of $28 million on revenues of $658 million with smartphone sales topping 1.1 million.
[source] Globe and Mail [/source]
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