TORONTO — BlackBerry has abandoned its bid to sell itself and is replacing its chief executive.

Fairfax Financial, BlackBerry’s largest shareholder with a 10 percent stake, said Monday it won’t buy the struggling smartphone company and take it private. Instead, Fairfax and other investors will inject $1 billion as part of a revised investment proposal.

BlackBerry said CEO Thorsten Heins is stepping down. Heins took over in early 2012 after the company lost billions in market value, but he failed to turn the company around this year with the launch of BlackBerry’s new devices.

Former Sybase Chief Executive John Chen was appointed chairman of BlackBerry’s board of directors and will serve as interim CEO. Fairfax head Prem Watsa has also been named a board member.

BlackBerry announced in September that Fairfax Financial Holdings Ltd. had signed a letter of intent that contemplated buying BlackBerry for $9 a share, or $4.7 billion, and taking it private. Fairfax said then that it wouldn’t increase its 10 percent stake, and the company went about trying to attract other investors.

Watsa said Fairfax did due diligence and worked with a consulting company that recommended that taking BlackBerry private with borrowed money was not the way to go.

“To load this company with too much debt was not appropriate,” Watsa told The Associated Press. “We didn’t want it leveraged. We didn’t even bother to go there. Once we decided that a leveraged buyout with high debt was not appropriate, we didn’t push it any further. We backed off completely.”

Shares of BlackBerry plunged 16.4 percent Monday to $6.50 on the Nasdaq.

Chen said he’ll be looking for a CEO with a strong software and services background. He noted that BlackBerry Messenger, the popular messaging application, has been downloaded by more than 20 million users since it became available on Google’s Android and Apple’s iOS platforms.

“I’d like to find somebody to help me monetize that,” Chen told the AP.

Chen’s emphasis on software could mean the company might ultimately get out of selling smartphones. Chen also said he wants to focus on business users.

Watsa said he remains a fan of Heins. “I think Thorsten did a terrific job given the hand he had been dealt,” he said.

The BlackBerry, pioneered in 1999, had been the dominant smartphone for on-the-go business people and other consumers before Apple introduced the iPhone in 2007 and showed that phones can handle much more than email and phone calls. In the years since, BlackBerry Ltd. has been hammered by competition from the iPhone as well as Android-based rivals.

This year’s much-delayed launch of the BlackBerry 10 system and the fancier devices that use it was supposed to rejuvenate the brand and lure customers. It did not work. Waterloo, Ontario-based BlackBerry recently announced 4,500 layoffs, or 40 percent of its global workforce, and reported a quarterly loss of nearly $1 billion.