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cooger72

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Everything posted by cooger72

  1. What a complete and total clown. There is no doubt that this is purely a move to consolidate power by making the stock less liquid and by pushing out smaller shareholders, or at least disenfranchising them. After this goes through, 300 of the pre-biglari SNS shares are what you'd need to have one share. I cannot identify a single positive in this for shareholders without the last names BigLiar or Cooley.
  2. This one shouldn't be terribly difficult for the counterparty to hedge... (if they were prudent). the bigger risk would be what Hamilton points out... having a counterparty that doesn't hedge properly. Your maximum loss is the notional value of the contract plus interest... and that's hedged with the short equity swaps. And the cash from the shares sold are probably invested in something relatively safe that could be used for this purpose, and if not, the rest of the portfolio is fairly large compared to any potential loss. I really would tend to think that the other equity swaps serve the purpose sufficiently.
  3. From the report: The excess of the fair value of net assets acquired over the purchase price in the amount of $83.5 recorded on the acquisition of GFIC is primarily attributable to the TIG Note being non-interest bearing except in periods, if any, when there is significant inflation in the United States." from page 15: On August 17, 2010, TIG Insurance Company (“TIG”), an indirect wholly-owned subsidiary of Fairfax, completed the acquisition of all of the issued and outstanding shares of General Fidelity Insurance Company (“GFIC”), for total consideration of $240.2 comprised of a cash payment due upon closing of $100.0 and a contingent promissory note issued by TIG (the “TIG Note”) with an acquisition date fair value of $140.2 (the “GFIC Transaction”). The TIG Note is non-interest bearing (except interest of 2% per annum will be payable during periods, if any, when there is an increase in the United States consumer price index of six percentage points or more) and is due following the sixth anniversary of the closing of the GFIC Transaction. The principal amount of the TIG Note will be reduced based on the cumulative adverse development, if any, of GFIC’s loss reserves at the sixth anniversary of the closing of the GFIC Transaction. The principal amountwill be reduced by 75% of any adverse development up to $100, and by 90% of any adverse development in excess of $100 until the principal amount is nil. The fair value of the TIG Note was determined as the present value of the expected payment at maturity using a discount rate of 6.17% per annum due to the long term nature of this financial instrument. Fairfax has guaranteed TIG’s obligations under the TIG Note. Following this transaction, the assets and liabilities and results of operations of GFIC have been included in the company’s consolidated financial reporting in the Runoff reporting segment. The purchase price of $240.2 is comprised of net assets acquired of $323.7 less the excess of the fair value of net assets acquired over the purchase price of $83.5 recorded in the consolidated statement of earnings. GFIC’s assets and liabilities as summarized in the table below is preliminary and may be revised when estimates and assumptions and the valuations of assets and liabilities are finalized within twelve months of the purchase date. GFIC is a property and casualty insurance company based in the United States whose insurance business will be run off under the management of Fairfax’s RiverStone subsidiary. Sounds like a complicated accounting fiction to me, and not the runoff having better than expected development.
  4. Would Biglari's shares get to vote? It would seem like you're overcounting if not.
  5. I think the offer is 1.1x book, based on the last Q, anyway. At the end of the day, it's the same premium Fairfax paid for Odyssey, and it's about what you can buy Fairfax for now... I'll trade FMMH shares for FRFHF on an even basis all day... (Although I'd rather buy at a discount). In any case, most of my thesis for being in FMMH was that you get good performing insurer at a discount with a money manager chomping at the bit to buy it up. Putting this one in the win column.
  6. I've done it on Schwab, although it traded below my bid for a while without buying for me. I finally had to put in a market order, but it executed pretty close to prior trades.
  7. Issuing at 347 and then buying back later at 357 isn't necessarily a bad thing as it has been portrayed on this board. I think it's much smarter to think of it in terms of a multiple to book value rather than a dollar figure. If the $347 is used to earn $10 before the share is repurchased for $357, the company comes out even as far as I can tell. Sure it seems like a lot of movement, but as long as the repurchase price is lower in relation to intrinsic value per share than the sales price, I don't think shareholders have lost anything.
  8. Has anyone who was invested in BNI last week received the conditional dividend? I sold Feb. 9, so I was an owner as of the record date (the 4th) but have not had anything post to my brokerage account as yet. Were all the conditions met?
  9. It shouldn't have anything to do with accrued dividend, which should be paid to holders of record on February 4. I was having trouble understanding the same thing, as I played the arb and sold Tuesday for 99.95 figuring I was entitled to the dividend.
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