How Blackberry CEO John Chen Could Hit The Jackpot

BlackBerry Ltd.BB shares have surged over the past two as retail traders and other investors purchased stock. BlackBerry’s Chief Executive Officer John Chen could catch a windfall if prices hold up, without him buying another share.

What Happened: According to his contract, Chen could receive over $200 million if the rally in BlackBerry continues, or at least finds support in its current range.

See also: How to Buy BlackBerry [BB] Stock

Chen, in his eighth year leading the technology company, renewed his contract in 2018, and in it there are big monetary incentives.

Why It Matters: As part of the contract, Chen received 5 million performance-based shares. He is able to sell 1 million share blocks as BlackBerry share prices increase starting at $16. For every dollar the share price rises after that, Chen is able to sell another block of 1 million shares until it reaches $20.

With Wednesday’s price action (the stock closed at $18.92), Chen may have already cashed out his 5 million shares, however, he has an incentive to continue closing deals to keep BlackBerry in the spotlight. Per his contract, Chen will receive a $90 million award if BlackBerry share prices reach $30.

What’s Next: Although Reddit traders of the now-famous WallStreetBets group are largely responsible for the sudden surge in BlackBerry shares, the recent performance of the company surely helped put BlackBerry on investors' radars.

In the past year, BlackBerry has announced partnerships with big tech companies such as Amazon Inc. AMZN, Baidu Inc. BIDU and Zoom Video Communications Inc ZM as it continues to successfully pivot from phone handsets to cybersecurity and the internet of things (IoT).

BB Price Action: BlackBerry shares closed Thursday's session down 41% to $14.65. In Friday's premarket session, the stock was up 17% to $17.16.

(Photo: Sam Churchill/Flickr)