Workers prepare the podium before the start of the BlackBerry 10 launch event by Research in Motion at Pier 36 in Manhattan on Jan. 30.
(Photo: Mario Tama, Getty Images)
SAN FRANCISCO -- BlackBerry stock hit the skids on Wednesday, falling 5% on concerns the company's deal to go private with Fairfax Financial Holdings won't survive.
"Chances of the deal going through appear grimmer at most," wrote Bernstein Research analyst Pierre Ferragu in a note to clients.
Shares of BlackBerry slid 43 cents, at $8.11, in midday trading.
BlackBerry on Monday announced it is forging a deal to go private with a group of investors led by Fairfax Financial Holdings, the insurance business run by Prem Watsa.
Troubled BlackBerry's deal to go private with Fairfax was touted prematurely because the company hasn't secured any type of other financing, notes Ferragu.
The $4.7 billion deal for BlackBerry included $480 million from Fairfax, which won't be chipping in more financing to the deal. That would require $1 billion in equity injections and $3 billion in bank loans, prospects that appear "unrealistic," says Bernstein's researcher.
"We think it will be unlikely that enough other investors will be joining the bid that sounds like a last chance rescue attempt for Fairfax's stake," Ferragu said.