lessthaniv

;D

Overstock.com Appoints Samuel Mitchell to the Board of Directors 2010-10-26 19:16 ET - News Release SALT LAKE CITY, Oct. 26 /PRNewswire-FirstCall/ -- Overstock.com, Inc. (Nasdaq: OSTK) reported today that the board of directors has appointed Mr. Samuel A. Mitchell to serve as an independent director for a term beginning October 26, 2010 and ending in 2011. Mr. Mitchell is a managing director of Hamblin Watsa Investment Counsel and a member of the investment committee which manages the investment portfolios of Fairfax Financial Holdings. Mr. Mitchell currently also serves on the Board of Directors and Audit and Compensation Committees of International Coal Group, Inc. Mr. Mitchell received an AB in General Studies and an MBA from Harvard University. "Sam has been providing great advice to the company for years," said Patrick Byrne, Overstock.com chairman and chief executive officer. "I value Sam's judgment immensely and believe that Overstock's shareholders will be well served by Sam's consistent vision of creating long-term value." About Overstock.com Overstock.com, Inc. is an online retailer offering brand-name merchandise at discount prices. The company offers its customers an opportunity to shop for bargains conveniently, while offering its suppliers an alternative inventory distribution channel. Overstock.com, headquartered in Salt Lake City, is a publicly traded company listed on the NASDAQ Global Market System and can be found online at http://www.overstock.com. Overstock.com regularly posts information about the company and other related matters on its website under the heading "Investor Relations." Overstock.com® is a registered trademark of Overstock.com, Inc. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, statements regarding the term that Mr. Mitchell will serve on the Company's board. Our Form 10-K for the year ended December 31, 2009, our subsequent quarterly reports on Form 10-Q, or any amendments thereto, and our other subsequent filings with the Securities and Exchange Commission identify important factors that could cause our actual results to differ materially from those contained in our projections, estimates or forward-looking statements. SOURCE Overstock.com, Inc.

Canfor Pulp earns $27.90-million in Q3 2010-10-25 20:33 ET - News Release Mr. Terry Hodgins reports CANFOR PULP INCOME FUND ANNOUNCES STRONG THIRD QUARTER 2010 RESULTS Canfor Pulp Income Fund is releasing its third quarter 2010 results, as well as the results of Canfor Pulp LP, in which the fund has a 49.8-per-cent ownership. The partnership reported record sales of $247.9-million and net income of $54.5-million, or 76 cents per unit, for the quarter ended Sept. 30, 2010. The partnership generated EBITDA (earnings before interest, taxes, depreciation and amortization) of $63.6-million in the quarter, similar to the record level in the second quarter of 2010. The fund reported net income of $27.9-million, representing the fund's share of the partnership's net income and a future income tax recovery of $800,000. In the quarter, the partnership generated adjusted distributable cash of $55.3-million, or 78 cents per unit, and the partnership and the fund declared distributions of 69 cents per unit. Partnership results were similar to the second quarter of 2010, as higher prices for the partnership's pulp and paper products offset lower shipments and higher unit manufacturing costs. The scheduled maintenance outage at the Northwood pulp mill, originally estimated to result in 10,000 tonnes of reduced production was extended for additional inspections and repairs to the recovery boilers. The additional work extended the outage into the fourth quarter of 2010, for a total of 24,000 tonnes of reduced production, with approximately 18,000 tonnes in the third quarter and 6,000 tonnes in the fourth quarter. Softwood pulp markets remained balanced through the quarter. Bleached softwood inventories have increased as a result of reduced demand from China and the typical seasonal slowdown through the summer months. Rising inventories resulted in a $30 (U.S.) price decrease in North American markets from the $1,020 (U.S.) peak in July, 2010, to $990 (U.S.) per tonne for September, 2010. Some North American bleached softwood capacity was restarted in late September, which will result in a modest increase in supply. Conversely, seasonal maintenance downtime through October should mitigate this increase in supply in the near term. The North American NBSK pulp list price for October, 2010, is announced at $970 (U.S.) per tonne, a $20 (U.S.) per tonne reduction from September, 2010. As reported in Stockwatch on Oct. 20, 2010, the fund declared a monthly distribution of 25 cents per fund unit for the month of October, to be paid on Nov. 15, 2010, to unitholders of record at the close of business on Oct. 29, 2010.

I think that could be a typo. Foex shows it unchanged and I believe paperage gets its data from Foex? http://www.foex.fi/

Seems likely a matter of the new fund's size. i.e. high fixed costs (legal, etc) compared to very low starting assets under management. As the assets grow from a very low base, the % should decline dramatically. I very much doubt that the fee would become uncapped in the near term. The fund would more likely be closed should it fail to attract enough assets to make it worthwhile in the next few years. Also, the fees on Chou's other small funds didn't rocket higher. So, I think history should provide more than a little comfort in this case. Agreed Norm, and one should also consider how many managers have choose to reimburse fees in year's of poorer performance too! I can only think of one.

One thought would be to define an over-arching template that your comfortable with which will assure you a minimum level of diversification. Say you're comfortable with 5 stocks. Your template may then look like this: 1 - 35% 2 - 25% 3 - 20% 4 - 12.5% 5 - 7.5% You could then use expected returns to fill in the blanks. Best outcome gets a 35% weight. Next best outcome gets 25% weight and so on... Overtime, you'd continue to calculate expected returns and rebalance accordingly. * I don't do this. Just a thought to throw into the discussion.

FAIRFAX ANNOUNCES PREFERRED SHARE ISSUE Fairfax Financial Holdings Ltd. will issue in Canada eight million preferred shares, Series I, at a price of $25 per share, for total gross proceeds of $200-million, on a bought-deal basis to a syndicate of Canadian underwriters led by BMO Capital Markets, CIBC World Markets Inc., RBC Capital Markets and Scotia Capital Inc. Holders of the Preferred Shares, Series I will be entitled to receive a cumulative quarterly fixed dividend yielding 5.0% annually for the initial five year period ending December 31, 2015. Thereafter, the dividend rate will be reset every five years at a rate equal to the then current 5-year Government of Canada bond yield plus 2.85%. Holders of Preferred Shares, Series I will have the right, at their option, to convert their shares into Preferred Shares, Series J, subject to certain conditions, on December 31, 2015, and on December 31 every five years thereafter. Holders of the Preferred Shares, Series J will be entitled to receive cumulative quarterly floating dividends at a rate equal to the then current three-month Government of Canada Treasury Bill yield plus 2.85%. Fairfax has granted the underwriters an option, exercisable in whole or in part at any time up to 9:00 am on the date that is two business days prior to the closing date, to purchase an additional 2 million Preferred Shares, Series I at the same offering price for additional gross proceeds of $50 million. Fairfax intends to use the net proceeds of the offering to augment its cash position, to increase short term investments and marketable securities held at the holding company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes. The offering is expected to close on or about October 5, 2010. Fairfax intends to file a prospectus supplement to its short form base shelf prospectus dated September 25, 2009, in respect of this offering with the applicable Canadian securities regulatory authorities. Details of this offering will be set out in the prospectus supplement, which will be available on the SEDAR website for the Company at www.sedar.com.

Canfor Pulp increases monthly distribution to 25 cents 2010-09-20 17:55 ET - News Release Mr. Terry Hodgins reports CANFOR PULP INCOME FUND ANNOUNCES INCREASE IN MONTHLY DISTRIBUTION Giving consideration to the accumulated undistributed cash generated by Canfor Pulp Limited Partnership during 2010 and the partnership's current projection of pulp prices for the rest of the year, Canfor Pulp Income Fund has declared an increase in the monthly cash distribution to 25 cents per fund unit. Accordingly the fund has declared a cash distribution of 25 cents per fund unit for the month of September, 2010, to be paid on Oct. 15, 2010, to unitholders of record at the close of business on Sept. 30, 2010. We seek Safe Harbor.

thusfar, the exchange rate hasn't been hurting us for the quarter either.

http://canadianinsider.com/coReport/allTransactions.php?ticker=FBK

PIX remained at us$1012.09 in the U.S. and rose to us$975.70 in Europe for NBSK. http://www.paperage.com/foex/pulp.html

I know Francis Chou at one point held CTO. I briefly looked into it but never pursued it judging that I was very late to the party. I see it is covered to some extent in manualofideas report. moi, thanks for posting that ... i enjoyed the read and will have to look a little closer at a few names. <IV

yes you're right. i misstated that, as FFH is expected to fully subscribe. it would affect the guy who can't subscribe. point taken on FFH. i'll modify that post as its wrong.

Well, here is what I believe transpired over the last month; On May 12th the announcement regarding refinancing the corporation was made. On that day, the stock closed at about $1.60/share. As we have read the debt refinancing and rights offering are contingent on each other. Alas, when the announcement was made regarding the debt refinancing the rights offering that would eventually come under the Fibrek banner had to be disclosed. The problem of course, the pricing of the rights offering had not been set. It is very unusual that a rights announcement would be made without providing the pricing information. It leaves the company open to price manipulation. But, because of SFK’s unique circumstances they were forced to announce it without the pricing. All we were given was the formula (lower of 40d or 5d average -20%). Therein lays the problem. Existing shareholders who were fully invested in SFK and could not pony up more funds (or were not willing to pony up more funds) under the rights offering were presented with a choice. a) Those shareholders could take a chance that a secondary market would develop for the rights themselves and they could try to sell their rights to someone else. Let’s look at this option a little closer with the perspective of an investor on May 12: At that time the conversion ratio was not known, but if an investor assumed it would be priced when the stock was at $1.60/share (price at the time) the conversion price would have been $1.28/share. ($1.60 - 20%). To raise $40M FBK would have to issue about 31M shares under these conditions and therefore the conversion ratio would have been 2.94. The theoretical price of the rights would be ($1.28/2.94) $.43/right. If the investor was able to sell his rights in the secondary market at the theoretical price (not likely) and then use the cash proceeds to buy FBK back at market ($1.60) they would be successful in at least offsetting some of the dilution. I think what’s more likely is the rights would trade at a steeper discount to the theoretical price as investors are competing to sell their rights within a very short window of opportunity. Therefore, the dilution would likely be more significant although they would be successful in offsetting some of the negative effects. b) The second choice an investor could have made would be to sell out a portion of their shares at $1.60 with the hopes of repurchasing shares at a 20% discount under the rights offering. This scenario is not without its risks. As you sell shares, you are reducing the # of rights you will receive. If the stock rose back up on rising pulp prices and falling currency exchanges you’d lose out on the gains, receive less rights and have a higher than expected conversion price. However, if the stock price fell from $1.60 you could win significantly. You would lock in your sell price at $1.60 and be able to buy back at a significant discount later under the rights offering. Consider if you had 100,000 shares of SFK on May 12. You sell 25,000 at $1.60/share and keep 75,000. You get gross proceeds of $40,000 in your pocket. If the stock price didn’t change from $1.60/share then this investor would receive 75,000 rights which allow him to buy 25,510 new shares under the rights offering at a 20% discount ($1.28). The investor makes profits of $8163 and is successful at offsetting dilution on his 75,000 shares. If however, the stock price drops after selling out at $1.60/share this investor has won huge. Consider the same investor but now let’s assume the stock price drops to $1.25/share so the conversion price becomes $1.01. SFK now has to offer 38M shares changing the conversion ratio to 2.28. So, this same investor who has received 75,000 rights can now buy back 32,900 shares at $1.01. This investor has made profits north of $19K and is successful at offsetting dilution. In other words, because the pricing formula was announced without the actual price a large incentive existed to drive the price of SFK down. That’s why I believe the stock dropped and it’s very unfortunate because it’s caused much more dilution (roughly 8% more) to the long term shareholder (who can't fully subscribe) than what would have happened if the price was set upon announcing the rights issue on May 12. <IV

Final Prospectus has been posted: Pricing is $1.01 reflecting the 20% discount as I suggested earlier. SUMMARY OF THE OFFERING The following is a summary of the principal features of the Offering and should be read together with, and is qualified in its entirety by, the more detailed information and financial data and statements contained elsewhere or incorporated by reference in this Prospectus. Certain terms used in this summary and in the Prospectus are defined elsewhere herein. Issuer: Fibrek Inc. The Offering: 90,472,708 Rights to subscribe for up to 39,602,848 Common Shares. Each holder on the Record Date will receive one Right for each Common Share held. Every 2.2845 Rights entitle the holder thereof to subscribe for one (1) Common Share. Record Date: June 18, 2010 Commencement Date: June 21, 2010 Expiration Date: July 15, 2010 Expiration Time: 4:00 p.m. (Montreal time) on the Expiration Date. Rights not exercised at or before the Expiration Time on the Expiration Date will be void and have no value. Subscription Price: The Subscription Price per Common Share will be equal to $1.01. Net Proceeds: Approximately $37,827,848, after deduction of the Subscription Fee of $396,028, the Dealer Manager Fee of $100,000 and the Standby Fee of $400,000 and estimated expenses of approximately $1,275,000, and assuming exercise in full of the Rights or purchase of Standby Shares to the extent that Rights are unexercised. Basic Subscription Privilege: Every 2.2845 Rights entitle the holder thereof to subscribe for one (1) Common Share upon payment of the Subscription Price. No fractional Common Shares will be issued. See "Details of the Offering - Basic Subscription Privilege". Additional Subscription Privilege: Holders of Rights who exercise in full the Basic Subscription Privilege for their Rights are also entitled to subscribe pro rata for Additional Common Shares, if any, not otherwise purchased pursuant to the Basic Subscription Privilege. The Standby Purchaser has agreed not to exercise its Additional Subscription Privilege. See "Details of the Offering- Additional Subscription Privilege". Exercise of Rights: A subscriber may subscribe for Common Shares by instructing the CDS Participant holding the subscriber's Rights to exercise all or a specified number of such Rights and forwarding the Subscription Price for each Common Share subscribed for in accordance with the terms of this Offering to such CDS Participant.

Oh yeah, as far as the dynamics of the offering go ... 1. All shareholders first have a right (called the "Basic Subscription Privilege") to acquire additional shares pro rata. 2. All shareholders then have a right to acquire, pro rata, any additional shares not acquired by other shareholders under the Basic Subscription Privilege (this additional right is referred to as the "Additional Subscription Privilege"). Further, Fairfax has agreed not to exercise its rights for that purpose so all other shareholders effectively have the first shot at providing the additional financing (and, therefore, increasing their stake) before Fairfax provides any additional financing. 3. Then, and only then, Fairfax agrees to buy up whatever is left to get a total offering size of $40 million. This is referred to as the "Standby Commitment" and Fairfax receives a cash payment as its fee for making this commitment up front, thereby ensuring Fibrek will successfully raise $40 million (subject to some standard termination rights).

Hey SD, Your wrong on this point. Fairfax doesn't get better pricing than the rest of the shareholder base. I confirmed this by talking directly with Patsie Ducharme last week. However, if you are still questioning it have a look at this: its an excerpt from National Instrument 45-101 of the Canadian Securities Administrators, which is the national rule that governs rights offerings in Canada. 7.4 Price of Securities -The subscription price under an additional subscription privilege or a stand-by commitment shall be the same as the subscription price under the basic subscription privilege. Bottom line - the price under a subscription privilege, an additional subscription privilege or a stand-by commitment (all of which are in the SFK rights offering) MUST BE THE SAME!!

We are officially Fibrek: Time Price Volume Buyer Seller 10:26:00 1.430 100 Anonymous National Bank

yes, they issued a press release today. should begin trading by Thursday under FBK

Also done two days after the refinancing and rights offering announcement. Obviously, they are not sitting on any other material, undisclosed information about possible asset sales then.

Yes, I agree too. I was speaking more to the Q2 outlook above (short term). In regards to operating costs, I'm not sure that SFK can align their input costs quick enough under the current structure? SFK entered into a fiber supply agreement with ACCC that became effective on Sept 1, 2009. The contract is a 3 year contract so that won't end until Aug 31, 2012. The contract with ACCC supplies SFK with 2/3rds of St. Felicien's required fiber at market prices. So, 2/3rd's of their fiber costs are locked into a contract at market prices. Even with $1000/tonne pulp prices, they are barely getting into the black in Q2 with the current costs of fiber. If pulp prices begin to retreat over the coming quarters (expected) then fiber costs must decline too to hold the margins and keep the company profitable. Annually, SFK requires 775,000 tonnes to operate to capacity. So, in terms of tonnes, SFK gets 520,000 tonnes from ACCC and the remaining 255,000 tonnes from other suppliers in the area. The AIF actually says, "The remaining required volume of wood fibre for 2010 is currently contracted with other suppliers in the region." This is interesting to me on two levels: 1) It would appear the remaining 1/3 is under a supply agreement up to the end of 2010. This may allow SFK to take advantage of lower prices in 2011 under a new agreement. I believe management said something to this effect on the CC. 2) Also, the comment tells us the suppliers are "in the region". This makes perfect sense as it saves the company transportation expenses by having the suppliers close. But, that leads me back to Domtar! Domtar operates the following mills in Quebec: Mill Chip Output Matagami: 93 Ste Marie: 31 Val D'Or: 136 Total 260 Note: the total chip output from Domtar's mills in Quebec is exactly equally to SFK's annual shortfall under their contract with ACCC. I am purely speculating here but I the options that I see are as follows: If Domtar is funneling their chips to SFK already they would be in an excellent position to buy St Felicien. They would have material savings on 1/3 of their chip costs which represent the largest component of COGs. Even if they aren't currently supplying SFK, but could going forward, the savings could be ascertained. If no deal is in the works for St. Felicien then an alternate plan B might be to become more self sufficient? Perhaps they flog their RBK mills (takes away currency issues) and funds the purchase of a lumber mill? They would be buying a lumber mill through the trough of a housing cycle (value?) and could supply themselves the chips for the pulp plant thereby ascertaining the savings themselves? <IV

Q2 Metrics for Q2: March 31/10 Today %Move Ex Rate ($c/$us) .9866 .9387 - 4.9% Pix Pulp Index 902.33 983.72 + 9.0% With all the moving parts of this beast (ie; debt restructuring, rights offering, trust conversion) its easy to lose sight of what's been happening to the fundamentals thus far in Q2. The comment below is from the AIF and on Dec 31, 2009 the exRate was about .95 $c/$us Based on 2010 expected sales volumes and the US exchange rate as at December 31, 2009, a change of US$10 per tonne in NBSK pulp prices has, on an annualized basis, an impact of approximately CAN$3.8 million or $0.04 per Unit on SFK Pulp’s net (loss) earnings (based on 90,472,708 Units outstanding, and before giving effect to the conversion of the outstanding Debentures). We've moved about $80/tonne on the Pix. So, (8*$3.8M)/4 ~ $4M. The exchange is slightly more favorable now. These additional earnings would be diluted somewhat by the rights offering. However, we will have some interest savings going forward on the restructured debt and perhaps we've seen the last of the write downs in Q1? As well, lumber prices remain strong and the cost of wood chips is easing. If pulp prices remain strong based on the low inventories present and the world continues to buy US$ treasuries as they have been doing in reaction to Euro zone problems, the situation could improve further.

finetrader, thanks - this is what I expected to hear. I did discuss the situation with a Securities lawyer who suggested to me the price discount would have to be for all shareholders too.

Interesting, It's sure not clear from the filings? I placed a call to Patsie Ducharme today. I'll try and clarify if the 20% discount only applies to the excess shares acquired by FFH or not. I'll post what I learn.

SD, the pricing on the rights must be for all shareholders. This isn't just a deal for Fairfax. Fairfax is entitled to a fee for the backstopping but they can't negotiate a 20% discount that bypasses the rest of the shareholder base. Therefore, the 20% discount is certainly relevant as it will lower the subscription price on the entire rights issue and thus increases the dilution factor. Having said that - Its normal that rights offerings occur at a discount. <IV