Viking

If Fairfax does not monetize a large chunk of BB i will be disappointed. If they have not and the reason they supply is weak then it will reflect poorly on management. (And there is a very good chance the reason could be infuriatingly weak). And poor management decisions is the key reason the stock is trading so much below peers. In terms of pricing i would be happy with anything over US$12. As has been discussed, they have such good uses right now for the cash. And the pandemic is not over. If they do not do anything there is one other possible reason: economic nationalism. Prem may feel Fairfax needs to nurture Blackberry for another couple of years until it completes its transformation. Few tech companies are based in Canada. Selling might be off the table (for now) because it is not a simple financial transaction (based on BB share prcice). Prem wants wait until Blackberry succeeds (to the benefit of Canada). Fairfax will get its payout perhaps in a few years when Blackberry has completed its transformation. I see a possible similar motive with other investments like AGT, Farmers Edge etc. Fairfax provides the seed money/environment/patience to create world class companies based in Canada. I may be completely off base with this comment. What they do with their BB shares and the reasons they supply will be instructive. Will the BB decision (or non-decision) impact what i do with my FF shares? Of course. If they monetize all or a large chunk of BB i will likely want to buy more (assuming i can get some at a reasonable price). If they do nothing with BB the reason they supply will be important. Fairfax continues to be a ‘trade’ and not a ‘buy and forget’ type stock because of management (and their style). My view is Fairfax has been slowly turning the super tanker the past couple of years (making better management decisions). Do we see more steps forward or a few steps backwards? The two big questions for me going into earnings: 1.) what, if anything, have they done with their BB position 2.) update on the mystery short position - a big deal or a nothing burger

How are people thinking about the three virus mutations? 1.) South Africa 2.) UK 3.) Brazil It appears all vaccine’s currently approved are less effective (lower efficacy) with the mutant strains. I am looking very big picture and trying to understand if these new strains are a big deal or a big nothing burger or something in between? Will re-opening of the economy possibly be stalled a quarter or two? With so many total cases all over the globe are even more strains now likely? Governments seem to be quite concerned with new travel restrictions being imposed to try and slow the new strains. Please post any informative articles you come across. I am not concerned... but my spidey senses are tingling. ————————- Novavax vaccine protects against coronavirus in variant hot spots but proved less effective against strain in South Africa - https://www.washingtonpost.com/health/2021/01/28/covid-vaccine-variant-south-africa/ - In a United Kingdom trial, where the B.1.1.7 variant has become dominant, the vaccine was 89 percent effective, and about half the infections were with the variant. - In a smaller and less definitive South African trial, where nearly all the participants who got sick were infected with the variant first identified in that nation, the vaccine was 49 percent effective. But the company underscored that when looking only at people not infected with HIV, the efficacy was 60 percent.

WRB reported two days ago... hard market is continuing with no end in sight. During each quarter of 2020 rate increases accelerated. They are confident rate increases are now running in excess of loss cost trends (which should improve margins over time). I think they said later in 2021 workers comp pricing should also find a bottom. The funny thing is WRB shares sold off very aggressively yesterday (5%) and are trading at the same level they were at back in July. Markel under $1,000 looks interesting (same price it was trading at in June of last year). Surprising Markel has not moved more given Markel Ventures; i don’t think Markel’s equity exposure is as large as Fairfax’s but i think it is bigger than most insurers (please correct me if i am wrong). Fairfax stock has done some serious catching (valuation wise) up the past 3 months compared to where it was trading in October versus its peers.

Greg's not coming back until he learns to resist his urges. Sure, his posts at times are good, but if his instinctive behavior is to stir trouble from time to time, and throw mud, that's not going to happen. And that doesn't apply just to Greg, but to others as well...I don't care which side of the political fence you are on. Learn to use Buffett's adage...if its borderline, don't do it...simple! Cheers! Thanks for providing the clarity. Moderating a board is not easy and you seem to be pretty patient with everyone. Bottom line, if you ask people not to do something and they continue to do it there are consequences. Not that complicated.

Sold some FFH; decided it was time to lock in some nice 20% gains. The last three months has been a moon shot for investors. I have been locking in gains the past week or so and am now at 65% cash. My top 3 holdings are FFH, SAP.TO and BRK. I think all three are cheap (Fairfax was back up the truck cheap back in October). The overall market is starting to look pretty frothy. Yesterday we saw some actual fear in the markets for the first time in months. The WallStreetBets worm looks like it may have turned today; what happens to the overall market when the GME type trades reverse and there is blood in the streets? It is coming we just don’t know the timing :-) The news on the virus front (UK, South African and Brazil mutations) has also been a little concerning; need to better understand what is going on and if it impacts the 2H recovery thesis. Bottom line, happy to book some solid gains and watch from the sidelines :-)

I agree :-)

Imagine if FFH does not sell any shares, Chen earns more than $200 million bonus and shares return to $7 per share in the coming months :-) CEO John Chen could collect more than US$200-million in compensation if recent huge gains in its share price hold up. - https://www.theglobeandmail.com/business/article-blackberry-share-craze-could-yield-windfall-for-ceo-john-chen/ Mr. Chen is in his eighth year in his turnaround attempts at BlackBerry, and has seen the company’s stock rapidly rise and fall for much of his tenure. But he’s seen nothing like the frenetic trading this month: The shares have quadrupled, including a gain of 80 per cent since Friday. Retail investors in the U.S. and Canada, many participating in a Reddit forum called WallStreetBets, have swept them up in a frenzy of social-media speculation. Mr. Chen is poised to be a huge beneficiary. When Mr. Chen renewed his employment contract in March, 2018, he received five million performance-based shares that he’d only be able to sell if the stock hit certain thresholds. He earns each block of one million shares if BlackBerry’s share price hits targets in one-dollar increments from US$16 to US$20 (its shares trade in Toronto and New York). ... When BlackBerry awarded Chen the shares in 2018, they traded at US$10.63, and the targets seemed aggressive, but achievable. BlackBerry needed to return 50 per cent to 90 per cent over five years for the awards to kick in, and the stock needed to nearly triple for the big cash award. It looked much, much harder in November of last year, when BlackBerry traded below US$5. However, in Monday’s trading, BlackBerry shares blew through all five price targets for the first time since the company made the award. The stock rose from US$14.04 on Friday to touch US$20.83. On Wednesday, it hit US$28.77 in intraday trading, before closing at US$25.10. Mr. Chen can’t bank the shares just yet: The terms of the stock award require BlackBerrry to average the minimum price points over 10 days of trading. BlackBerry only began topping the minimums Monday, so Mr. Chen hasn’t qualified for any of the payouts yet. Also, BlackBerry structured the share grant to keep Mr. Chen at the helm for the full five years: The stock “vests,” or can be sold by Mr. Chen, in five annual increments from 2019 to 2023. So even if BlackBerry shares stay up for several weeks, he can’t realize all of the gains for several years. At Wednesday’s closing price of US$25.10, the five million award shares are worth US$125.5 million. If the US$90-million payment is triggered at US$30, the whole package would be worth US$240-million.

Yes! Not sure what I’m nervous of though! I feel exactly the same way. Surely to heavens Prem is selling portions daily as this rally goes on. I would feel much better about Prem having $2B in cash to take advantage of whatever opportunities might exist when this blows up versus hoping for another turn in Blackberry. I'm nervous that he DOESN'T sell - not that he sells too soon :/ I don't care if BB goes to $400 - I'm not going to be mad that he sold at $25. If Fairfax does not sell any BB while it is trading at these levels (US $25 today) and the shares return to $6-$7 i think you will see sentiment in Fairfax hit a new all time low. Especially when Prem tries to explain the logic of not selling...

It appears some analysts are starting to connect the dots for Fairfax and Blackberry. This could. Fuel the next move in Fairfax shares. BlackBerry Revival Rewards Watsa’s Patience With Huge Gain - https://finance.yahoo.com/news/blackberry-revival-rewards-watsa-faith-130443385.html Bloomberg) -- Day traders have pushed BlackBerry Ltd.’s share price to levels not seen in more than nine years. They’ve also given a jolt to a Canadian investment company that got crushed in last spring’s market crash. BlackBerry soared 13.9% to $21.55 as of 10:51 a.m. in New York on Wednesday, bringing its gain for the year to 225%. That is repaying the patience of Prem Watsa and his Fairfax Financial Holdings Ltd., which owns 8.3% of the software firm’s shares, according to data compiled by Bloomberg. Once the toast of the mobile tech world, BlackBerry failed to keep pace with competitors including Apple Inc. and the stock lost most of its value in 2010 and 2011. Around that time, Watsa, a value investor who has tried to model Fairfax after Berkshire Hathaway Inc., began building a large stake, which also includes convertible debentures with a conversion price of $6 each that could be turned into 55 million shares. The run-up in BlackBerry shares this year would drive a pretax gain of about $1.16 billion for Fairfax in the first quarter, Phil Hardie, a Toronto-based analyst at Bank of Nova Scotia, told clients in a note before markets opened on Tuesday. Hardie upgraded his recommendation on Fairfax’s shares to a buy-equivalent. Fairfax closed at C$488.94 on Tuesday. With a 12.7% gain as of Tuesday’s close, it’s the best-performing financial stock in the S&P/TSX Composite Index this year after being one of the worst in 2020 with a 29% drop. Scotiabank’s most bullish scenario for Fairfax “implies almost 50% upside and assumes that the stock sheds its valuation discount and trades at book value, with Fairfax locking in recent gains in BlackBerry through hedging or monetizing its position,” Hardie wrote. Fairfax didn’t respond to a request for comment.

No choice, since he used up his dry powder to buy Cyient. Another way to think of it is the following: broadly speaking with FFH' portfolio doing better now than say 6-9 months ago, has enough 'pressure' been lifted off the dreaded D/E ratios, such that if Watsa chooses to either trim/keep/sell BB it will be entirely based on the merit of the investment and the right-sizing of the portfolio ... and not because he is a situation where he needs to trim/keep/sell. I think with so much treasury and cash in the $40 billion portfolio, he doesn't really need to the 'liquidity' that selling BB will provide to him, other than freeing up capital for another equity investment of the same risk profile, in which case, he would be moving money from something he knows relatively really well to a new name that he probably knows less well ... and in market that is broadly speaking very expensive by some measure and yet fairly valued by other measure (interest rate). EDIT: lastly, if he doesn't do anything about it, when he has the chance, man o man, that is going to be a huge endorsement of BB's potential. It is one thing to talk about its potential when BB is down, it is entirely another thing to have an opportunity to lock-in big short term profit and forgo it ... to me that is going to be a huge bullish signal on BB. The intellectual exercise is fascinating, and I am going to need to some popcorn for the Q4 results. If Fairfax does nothing and Blackberry price returns to earth ($6/share) this will not motivate me to buy Blackberry. It will motivate me to sell Fairfax (all other things being equal). We all have pretty good handle on Blackberry and its potential and its warts. What we have right now is Fairfax is being given a wonderful opportunity. The question is are they going to take it or not. Yes, we should know more when Fairfax reports Q4 results (or sooner if they actually do something :-)

Time value of money has to matter. Certainty over potential has to matter. Realizing a massive gain when cash has wonderful alternative uses has to matter. Bottom line, if Fairfax had an opportunity to sell BB at current prices and they do not i will view it as an error. We are still in the middle of a pandemic. Cash is extremely valuable right now. Especially for Fairfax. It is not unrealistic that we see the virus mutate and the economic recovery is stalled. Stocks sell off. Fairfax taps debt lines further to get through. And are forced to sell some of their best assets because they are in need of cash. This is not a difficult decision (if there is a way to exit).

The gang at Wall Street Bets have found an inefficiency in the market and they are exploiting it. Just like lots of very profitable hedge funds and investors do all the time. The difference is there is much more transparency (of some kinds)... The regulators will make a call on if rule changes are required. Over time we should expect the ‘alpha’ to be competed/regulated away like all money making strategies that work.

Here is what Fairfax had to say in the last 2 annual reports on Farmers Edge. 2018 AR: Farmers Edge. Farmers Edge was founded in 2005 by Wade Barnes in Winnipeg, Manitoba as a project-based consulting company providing value added agronomy services for large scale farmers. The business has since evolved into one of the leading SaaS (software as a service) farm management platforms with 24 million acres under management as of December 2018, with an anticipated increase to 40 million acres by the end of 2019. Key services offered under the Farmers Edge platform include: 1) One of the highest density of weather stations in North America. Farmers can have alerts sent to their phones, even at 4am, if there is to be frost on one of their farms. Important, as there is only one harvest! 2) Daily satellite imagery to track crop health via tablet, phone or PC. 3) Brand-agnostic telematics enabling passive data collection. 4) Soil sampling and variable rate fertilizer application, which allows farms to increase yields with less overall fertilizer application. Four-year customer contracts provide Farmers Edge with predictable recurring revenue and cash flows. Fairfax made a $95 million equity investment in March 2017 and has since provided additional funding of $64 million in the form of debentures plus warrants, based on an implied valuation of 4x projected December 2019 base business EBITDA. 2019 AR: Propelled by its founder, Wade Barnes, Farmers Edge has continued to grow acres under contract and, along with it, predictable recurring revenue and cash flows. Bill McFarland has become the Chair of Farmers Edge and will continue to support Wade as he builds out this valuable precision agriculture platform.

More positive press for Blackberry. The Globe’s stars and dogs for the week - https://www.theglobeandmail.com/investing/investment-ideas/article-the-globes-stars-and-dogs-for-the-week-139/ BlackBerry Ltd. (STAR) $17.85+5.37 (43.03%) Maybe it should be renamed BlackBerry In Motion. Shares in the company have been skyrocketing faster than the Waterloo housing market this year, almost doubling in value since the start of this year. There’s been a slew of good news of late, including a patent dispute settlement with Facebook and a partnership with Amazon to work on cloud-based vehicle software. But for now, it is stock market momentum that’s really got this former tech darling charged up. BlackBerry is back with a new kind of playbook – and, for a change, this one is getting rave reviews.

I listened to Gundlach’s 2021 outlook presentation. I think his basic conclusion is you need to have a barbell strategy to take advantage of either inflation happening or a continuation of disinflation/mild deflation. Smart people seem to be pretty stumped about which scenario we get in the coming year (s).

Is this a response to the superstockmarket and government monetary policy? Yes - at the risk of diverting this thread into the political quicksand, I am concerned about inflation as it seems to be a risk that many market participants are discounting right now. I'm cognizant of the fact that gold yields nothing, but I'm overexposed to USD as a US resident, and I think that the fiscal bias of the new administration will be towards more stimulus. We will have the most dovish Fed chair in history working with the second most dovish Fed chair in history (in her forthcoming role as Treasury Secretary) along with a new President who has voiced support for significant spending programs. The prudence of Paul Volcker is long past, we're now well over 100% debt-to-GDP in the US, and given our relatively anemic GDP growth over the past decade, I don't see us "growing out" of that debt, meaning that the only course for policymakers is full on fiscal repression. Anecdotally, I'm already seeing significant increases in grocery prices along with dastardly "shrinkflation" (same price, less food), and it seems like some of the current levitation in the stock market may simply be attributable to the sheer amount of liquidity surging into the system. That being said, I seem to be an excellent contrary indicator on macro, so those reading this might want to load up on NASDAQ calls :D My guess is we get a big inflation head fake later in 2021 as the economy gathers steam. And then the deflationary forces kick in again. I am in the Lacy Hunt / Hoisington camp that more debt = disinflation perhaps leading to mild deflation in a few years. The good news in the US is the consumer is in good shape (debt wise) unlike Canada. 2021 is setting up to be a blowout year for asset prices (driven primarily by free money). Where i live in Vancouver people are starting to predict record price increases for housing in the spring selling season (which of course would set nose-bleed record selling prices). Price increases for housing also look strong in the US. Makes sense to me stocks will also join the party (who wants to own bonds in their portfolio anymore?). Hang on tight... the roaring 20’s might just be getting started :-)

So Blackberry shares traded at US$6.63 on Dec 31. Today they are trading at $11.75 = $5.12 increase. - Fairfax owns 46.7 million shares = $239 million increase. - Fairfax also owns debentures ($6 conversion) or 55 million more shares = $282 million increase. - total increase = $514 million / 26.5 million shares = about $19/share pretax - this is a mark to market position I agree, Blackberry looks to be in all the right segments. It is surprising to me that someone has not tried to take it out just to get the technology and/or people. Or perhaps Chen does have the right plan and he just needs another year or two for the results to start to come through (and justifying a much higher share price). In terms of where BB is trading, look at all the other companies in the segments they compete... are they not all trading at nosebleed levels? It does make some sense on a relative basis.

Xerxes, events like 1999 (and 2020) are a test for investors; experiencing adversity (bear markets) is a great test of skill and fit. There are always good lessons to be learned from looking at the past. How an investor does over the entire cycle (encompassing both bull and bear markets) should provide good feedback for an investor of his/her investment philosophy (does is generate an acceptable return and meet your other objectives) and fit (does it let you sleep at night). And as i get older i am noticing small adjustments over time (it is not static) as both objectives and tolerance to risk change.

I think there is a good chance Fairfax could trade over US$600 in 2021. With shares currently trading at $382 that would give investors a close to 60% return. How? At Sept 30, 2020 BV was US $442. By Q3, 2021 there is a good chance BV could be over $500. As earnings, BV and sentiment in the company improves we could see a 1.2 x multiple (hardly expensive) = shares at US $600. Not a crazy number. In Q4 we know their equity positions increased in value by over $1.4 billion. (Yes, a majority of the positions are not mark to market.) In the last 2 weeks Blackberry is up another $300 million. It looks like their stake in Digit may be worth $400 million more. Their other equity holdings are continuing to increase in value in Q1. We could see their equity holdings jump $2.5 billion in 6 months (i am lumping Digit in here). That is $90/share (yes, i understand this number is messed up given how the equities are accounted for; i put it out there more to provide some magnitude). Bottom line, this would be very good for shareholders were it to play out. The insurance business is in a hard market. There is a lag between price increases and higher earnings. 2021 should be the start price increases flowing through to earnings. RBC is forecasting that when this inflection point happens the market multiple will increase. This will provide a double benefit for shareholders of higher earnings and higher multiple from Mr Market. Earnings from associates should also become a tailwind in 2H 2021 as the economic recovery takes hold. Fairfax is highly motivated to monetize assets; they have said this repeatedly. Unfortunately the pandemic slowed sales in 2020. They have a slew of companies they could monetize... the challenge is we do not know the company, the timing or size/impact. The key here will be a continuation of the risk-on environment in financial markets. Fairfax could generate $500 million or more in proceeds in 2021 from selling off stakes in AGT, Farmers Edge, Peak Performance (Bauer), Toy’s R Us (real estate) etc. Fairfax also owns a few lottery tickets. A Blackberry sale? Digit IPO? Atlas could easily trade much higher than $11/share. US$ weakness; strength in EM could jack Indian investments. Stock buybacks: if Fairfax is successful with asset monetizations (the odds look good right now) there should be ample $ to grow insurance co’s in hard market AND to also buy back a material amount of stock. Watch the stock pop on news of a large stock buyback. Management credibility: Another opportunity for Fairfax is what management does in the coming year. If their words and actions instil confidence in investors then this should support multiple expansion. Will they pull another rabbit out of the hat? Fairfax also has a history every few years of doing something creative and unexpected that is good for shareholders. Recent examples are First Capital and Riverstone UK sales. With FFH shares this cheap my guess is they are highly motivated to find some $ to take out a significant number of shares :-) Bottom line, the company has a large number of significant tailwinds as we begin 2021. The key is a continuation of the current risk-on sentiment and shift to cyclicals/EM. If it continues into 2021 and Fairfax is able to monetize a few investments then shareholders could see a very solid return on their shares. We will see :-) PS: there are also lots of risks... like the virus mutating into a more deadly strain... like the Tesla stock bubble popping, taking the stock market averages down 30-40%... like a double dip recession hitting in 2H 2021 (instead of expected recovery)... like hard market coming to a screeching halt... like Fairfax management doing something very dumb... management at the large equity holdings doing something dumb (Atlas, Blackberry, Eurobank)... reserving issues rearing their ugly head...

My wife’s niece (in her early ‘30’s and no investing knowledge) texted her this weekend asking if this was a good time to buy Tesla. A buddy of mine texted me last week. His son was keen to invest in two companies (they were small; i had never heard of them) and wanted to know if they were a good investment. This is starting to feel a little like the late ‘90’s... ————————— My recollection of the late ‘90’s was it was a VERY bifurcated market.... new economy = bubble; old economy = on sale. I do think there are parallels today. Tesla = bubble; however lots of sectors are cheap = telecom, pipelines, energy and lots of other stuff is not crazy expensive = financials, insurance, some reits and more. —————————- Where do we go from here? The .com bubble blew bigger for 4 or 5 years so we could just be getting started with this version. Perhaps at some point we see a crash in the high flyers and a rotation into the cheap stuff (similar to what happened when the .com bubble popped).

Some good news... ——————————— ...Ms. Home is part of a growing army of volunteers who have pushed Britain’s vaccination effort harder and faster than anyone expected. Hundreds of village halls, recreation centres, churches and community clinics have been turned into makeshift vaccination sites and tens of thousands of volunteers have manned phone banks and gone door-to-door to make sure that as many people as possible get their jab. ...If the current pace continues, government officials believe that everyone over 50 – roughly 32 million people – could receive their first dose by the end of March and that all adults could be vaccinated by the end of June, three months earlier than expected. Britain’s mass volunteer effort sets blistering pace in COVID-19 vaccination effort - https://www.theglobeandmail.com/world/article-mass-volunteer-effort-puts-uk-ahead-of-schedule-on-vaccine-rollout/

Cigarbutt, you make a very good point. The drop in bond yields is the ‘in plain sight’ big issue for insurers, given it is relentlessly driving investment earnings lower. The ‘out of sight’ potentially big issue for insurers is being under-reserved. Perhaps both explain the current hard market and also why the hard market may last for some time (a couple years). Fairfax in recent years has had a pretty good record with reserve releases. Lets hope it continues in the coming quarters/years. This is something i look at when they report. I think Q4 is when they do a complete review (so if there are issues this is when they will likely surface). One area i will watching in Q4 is runoff. Now that the good part of runoff has been sold (Riverstone) it will no longer be possible to hide the increase to reserves from the ugly part (asbestos). I think last year in Q4 they took a $200 million hit. I would not be surprised to see another big hit this year. Obviously, this is just a guess on my part.

Yes, i would love to see continued stock buybacks in Q4 (hopefully they took out another 2% of shares). Brk, Apple and BAC all flush with cash and buying back meaningful amounts of stock all at the same time. Has to benefit shareholders of BRK at some point in time :-) PS: yes, i hope BRK continues to sell Apple shares, given current valuation and position size. The issue is what to do with the proceeds - we keep circling back to this core ‘high class’ problem of BRK holding (apparently indefinitely) too much cash!

The key catalyst for Berkshire stock is what Buffett does with the cash hoard of $145 billion over the next year. If he is able to put a significant amount to work this will drive the stock price (improving both earnings and sentiment in shares). Immediately after the pandemic broke out he got extremely risk averse. Not only did he not buy anything he sold out of some positions like airlines. His commentary during the AGM was pretty dour. And preservation of capital for long term shareholders was clearly his core objective. As 2020 progressed it appears Buffett got more comfortable with the pandemic. More optimistic. And you could see this with his purchases as the year progressed: - Japanese stocks - big pharma - meaningful buybacks of BRK stock The new news (November) is we now have vaccine’s approved and actually in arm. It makes sense that this should help make Buffett even more comfortable/optimistic and further shift from capital preservation to more of a risk on approach. So i think there is a good chance we may start to see the cash hoard decrease in size each quarter moving forward: - BRK stock buybacks? - pipelines? - lots of cheap opportunities here; in BRK circle of competence - energy? - other international? - other domestic US?

Nwoodman, thanks for posting. Can someone explain what a new $1.9 billion total co valuation for Digit Insurance means for Fairfax? Does Fairfax still own 49%? Will this new, much higher valuation for Digit flow though to BV for Fairfax when Q1 report comes out? Fairfax certainly has a lot of significant tailwinds. The news just keeps getting better :-) Here is a review of Fairfax’s ownership in Digit from 2019 AR. Page 68: On December 23, 2019 Go Digit Infoworks Services Private Limited (‘‘Digit’’) entered into definitive agreements whereby its general insurance subsidiary Go Digit Insurance Limited (‘‘Digit Insurance’’) subsequently issued approximately $91 (6.5 billion Indian rupees) of new equity shares primarily to three Indian investors. This transaction valued Digit Insurance at approximately $858 (61.2 billion Indian rupees) and resulted in the company recording net unrealized gains on investments of $350.9 on its investment in Digit compulsory convertible preferred shares. The company also holds a 49.0% equity interest in Digit as described in note 6. Page 72: On December 23, 2019 Digit entered into definitive agreements whereby its general insurance subsidiary Digit Insurance subsequently issued approximately $91 (6.5 billion Indian rupees) of new equity shares primarily to three Indian investors. This transaction valued Digit Insurance at approximately $858 (61.2 billion Indian rupees) and valued the company’s 49.0% equity interest in Digit at $122.3 at December 31, 2019. The company’s 49.0% equity interest in Digit is comprised of a 45.3% interest in Digit common shares and a 3.7% interest through Digit compulsory convertible preferred shares that are considered in-substance equity. Foreign direct ownership in the insurance sector in India is limited to 49.0% and as a result the remainder of the company’s investment in Digit compulsory convertible preferred shares are recorded at FVTPL as described in note 5.