Dazel

Short volumes....would fit a Fairfax hedge.

I agree with Viking. I miss the days when Prem and Fairfax were simple. They likely shorted AMC, GME, Nok, Pltr, as hedge and got killed for awhile....as a hedge. They can’t know what BB is worth over X...it was not worth $28 USD at this time....maybe the future...reaction you sell it as Wade Burton did. It’s why I recommended SNC for them to buy...it’s now a service business which is quantifiable...not sexy but good returns...and you would not buy it without the 407 and royalty assets. Simple A+B =C/ future cash flow...how is that price compared to the market price. SNC trades at about 2X...their competitors trade at 15 to 20. Yep simple it’s a buy. Blackberry cash flow? I understand A +B (royalties like SNC)=C/ future cash flow...trade at 100X SNC... The answer is simple selll BB and buy SNC or X....everything else is emotion unless you think you can change that future cash flow number to bring the 100X closer to X or SNC. The future return probabilities of the two stocks in a value world are UNMIStAKAbLE...you could use the same comparison for Atlas but more importantly to me Fairfax. Keep the money in Blackberry at $25USD or buy back Fairfax shares with the proceeds? Simple answer. It’s likely the same answer at $11....and the market thinks Prem missed it (Fairfax shares dropped like a stone) so I guess that is what we have...time to move on.

Doc75, You may be correct....I did a lot of digging after your post. It’s how you interpret the ruling. The swap that Fairfax bought was for all intensive purposes a “substitute” for common shares. Which effectively would give them economic Benefit the same as common shares except they do not get voting rights or the shares as they have to be exercised for cash and cannot be redeemed for shares. The derivative meanings in early warning reports are different for lenders etc...and to be very honest I don’t know as I am not lawyer. Lending shares and short sales are very grey in their interpretation in what has to be important. Hedging does not appear very often...in fact I have never seen it show up in an early warning report. The SEC certainly does not have it with their 13d disclosure. Stan drukenmiller would have lawyers working 24 hours a day.... The rules are made for take overs and that is why they are early warning...so the design is not let someone sneakily take control of a company and screw the minority shareholders because they do not have the votes....hedging is NOT part of this. But you are correct a swap contract was not likely used. Short sales can be performed without disclosure for number of days I think 3....as long as they are covered. Fairfax could have done this a number of times....there was a lot of action and volume to be able to do this...but as far as disclosure...they could have got around it...

I know it’s just another $1b in gains but I think reputation wise it would solidify “The Warren Buffett of the North” is back and Fairfax needs something like this...discount to book and very little respect. Prem I hope you are smiling.

Sorry for all the posts...but suffice to say Fairfax has never been in the position they were in last week. They had been preparing for it all their careers. Insiders sold Lace and Burton...$11 apart. They were Literally spending all of their time looking at it..as was all of the world!

Doc75, They had to disclose it because it took them over the 10% early warning threshold of Ensign’s outstanding shares. I do not see any occasions of them announcing the sale of shares when they are above the 10% early warning unless they are shares of a company that are sold wholly or in an offering.

https://www.fairfax.ca/news/press-releases/press-release-details/2014/Fairfax-Exercises-Option-to-Acquire-Additional-BlackBerry-Convertible-Debentures/default.aspx Fairfax was getting 6% on $1b before the 3.75% ($655m)...and now 1.75% hopefully redeemed...$60m x 2=$120m, $24.6m x 4 =$98m...$218m in interest. If they did hedge their shares...the return would be decent over 6 years and change. In other words, what looked like a disaster would look very decent over the term of the investment and would be a major victory for Fairfax shareholders.

To Sanjeev’s point it may be Puts, short sales, writing calls and swaps. It think they were busy and likely over a variety of prices.

https://www.fairfax.ca/news/press-releases/press-release-details/2020/Fairfax-Announces-Entering-Into-Swap-Contracts-in-Respect-of-Common-Shares-of-Ensign/default.aspx They are experts in these type of transactions...I expect them to have done something in BB shares....as I keep bringing up! Lol

There is angst among Fairfax shareholders it is obvious the share price has tanked 10% while the market booms..it barely went up during the BB frenzy. Here is why I think they are doing this: I just reread the Fairfax standstill agreement for the second time...Fairfax is doing the right thing...it’s not required but good form to hedge the shares and NOT sell them before the standstill agreement is over 6 months from the debenture deal. They are not sold...and Fairfax could cover the short sales and keep the shares at its option and there would not have been a sale of their stake. The convertibles are not converted yet and it is common practice to hedge convertible bonds with short sales. The fact that Fairfax is in the standstill agreement it covers all of their 16.5% BB stake (if converted). It just does not look professional to sell the shares outright during the standstill period. I think these are important press releases the second one more important...This would let the public know that there is no non public information being withheld that warrants the share rise. In other words buyer beware the shares are rising without a material reason so we are going hedge you have been warned! https://www.blackberry.com/us/en/company/newsroom/press-releases/2021/blackberry-expands-partnership-with-baidu-to-power-next-generation-autonomous-driving-technology https://www.blackberry.com/us/en/company/newsroom/press-releases/2021/blackberry-comments-on-trading-activity-at-request-of-the-industry-regulatory-organization-of-canada

Thanks Viking. Also Remember Fairfax had $10b in corporate bonds at September 30.

https://www.businessinsider.com/appharvest-from-seed-to-1-billion-in-3-years-2021-1 https://www.marketwatch.com/story/greehouse-company-appharvests-spac-debuts-11612200621 Hurry up Fairfax!!!!!!!!! Farmers edge. Who knew that I could invest in a agritech through Fairfax?!

https://theprint.in/india/disney-is-booming-in-india-and-could-become-its-largest-global-market/543276/ https://fortune.com/2021/01/30/disney-plus-india-cricket/ https://economictimes.indiatimes.com/tech/technology/hotstar-largest-contributor-to-disneys-q4-subscriber-growth-has-about-18-5m-paid-members/articleshow/79205495.cms?from=mdr https://deadline.com/2020/12/disney-stock-all-time-high-streaming-investor-day-disney-plus-hulu-espn-1234653043/ Disney plus subscriber base main driver is India...their other businesses are in the tank and India $ per subscriber I relatively low to other countries...so why do they get so much credit in their share price for the growth? Because it’s going to continue... Fairfax Digit investment and others are not reflected in their perception and share price......there is a window to buy back shares here before it heads back to an all time high. The market will figure out where Fairfax is in this growth...C-19 was a big hiccup for that potential but as you can see from Disney India growth driving part of its share price...Fairfax upside as more of pure play on growth in India is potentially explosive.

Blackberry could be $25 again next week. Who knows... But Knowing Fairfax they would have exited BB financially (short hedge) with as little ripples as possible. This is not a time To be cocky about wins in the market or to hurt BB share price in anyway. Fairfax goal would be to show capital strength as the reasoning for a synthetic sale. They will likely have to announce this with earnings...because it will effect the share price which effects the buyback program. The blackout period will end for a time with the earnings announcement where they will have an opportunity to buyback a significant amount of shares. Right now they are on an automatic share purchase program (blackout period). They also want the sale proceeds from Riverstone in the account so they can buy a significant amount of shares back well below book value. This would be huge for Fairfax....BB win was not even in my look at what Fairfax has coming...Farmers edge IPO...AGT...they could buy 10% of their shares back in the next few months if volumes are there and the share price cooperates (discount to book).

https://www.cnbc.com/2021/01/30/gamestop-point72-founder-steve-cohen-leaves-twitter-after-family-receives-threats.html

LMAO! I can’t figure that out!

Not that anyone really cares!lol.

I was joking kinda with posts I erased them so they are not taken out of context...because they were Massive SPECULATION!

Fairfax are short will cover with their shares when appropriate IMHO. Onex had the luxury of waiting...Fairfax is an insurance company they measure capital everyday...it’s a hard market. I think it is the opposite of what’s on the board...they likely started early. Gain $1b from year end. Blackberry did not take Fairfax stock up on its ride...but it sure did bring it down on its drop... So time to move on Farmers Market anyone?

If Fairfax were to hedge say half their position by borrowing 50m shares (shorting the stock)...they would indeed shrink the available shares in the float because they would not cover the shorts with their own shares right away because they would still have 43m shares that were not hedged. So they would control approx 150m shares through ownership and short (hedge postions). They could cover anytime but likely would not. They would effectively Shrink the float by another 10%. This would dump lighter fluid on the squeeze...

$600m gain now.

Fairfax’s Blackberry holding is up $400m this morning. I don’t care how....Prem knows more than we do... The insider dump I see as headline was hardly that it was a dribble of shares sold...I checked and am betting no one else did. Nice to see FAirfax on the other side of a massive short squeeze but BlackBerry’s stock was controlled by short sellers and MM for years. The question is does Prem wait like Onex did...and make $4 or $5b...or sell or does BB stop going up. I love it because I am not paying for the option when buying Fairfax shares. Get some popcorn today. It appears to me that there is now trend in smashing undervalued small float value stocks where short sellers and MM have controlled the stock prices for year and years!!! Sound familiar? Look at value stock performance. It is just what I am seeing...I may be late or early or in the middle no idea! As strategy, at the start it makes sense...WSB target picks are NOT made by kids...that is for sure. They are carefully thought out and have some margin of safety at the start...for the most part. Most don’t know that Ford and GM are favourites as well. Pattern?

Jesse Livermore used to trade Anaconda...imagine what he could have done with WSB! Should we trade Blackberry to 100? That’s one of their targets. Lol.

https://www.theglobeandmail.com/report-on-business/onetime-tech-star-celestica-tanked-but-its-parent-still-got-rich-how-come-because-investors-dont-come-any-savvier-than-onex-czar-gerry-schwartz/article18140053/

How did Gerry Schwartz (Onex-perhaps the greatest private equity investor of all time) hold Celestica shares during their Massive run up in 2000? Onex bought the company from IBM in 1996 for $500m. He knew exactly what it was worth and rode their rocket ship to almost the top. Onex did an equity monetization at that point....for a game changing gain for Onex in 2000. How? Prem has to be thinking about this....the market is acting like he already sold with Fairfax stock falling 10% this week.