bluedevil

It seems to me if the stock goes public at 10-17 dollars a share, there has to be creative ways to hedge/lock in some gains. Perhaps you can buy puts; or buy puts on other ag tech companies, etc.

I am hoping in the future, there will be less "volatility". Prem has laid out a roadmap for that once we get beyond the current balance sheet issues (and perhaps we have already done so). No more insurance acquisitions - let the current empire grow organically, rather than having to deal with bad acquisitions or having to stretch the balance sheet to do them (e.g. Allied). No more hedges/shorting, and the boom/busts that come with it. Hopefully, from experience, be more wary of value traps. Buy back shares with excess cash flow. And we all live happily ever after :)

Bloomberg article on IPO: https://www.bloomberg.com/news/articles/2021-02-09/farmers-edge-files-papers-for-initial-public-offering-in-canada

With accrued interest, it is 272m in debs. And some deal with Osmington that suggests FFH gets 10m more shares for 2.40. Plus they get 18m additional shares as warrants for the debs. At no cost. If the IPO pricing is right even at the very low end of the range, this seems like a huge payoff. All in all, if I followed everything, they will have 140m shares at a cost of ballpark 300m. 10 dollars per share means ballpark profit of 1.1 billion! 17 dollars per share means ballpark profit of 2.1 billion! I hope I’m reading this right and they IPO range is real.

Assuming they have a reporting obligation, they have five days to report. That means they didn't do anything last week, or else it would have needed to have been disclosed by yesterday. We'll know by EOD Friday (or Saturday I suppose) whether they sold.

-- Right. I am hoping they convert the note and sell everything! Take the 1B of profit on the note and run before reality reasserts itself.

Barring a restraint, I think there is virtually no chance FFH has not sold out much of its common stock over the last three days. Just a gut feel from following this company for a long time. They don't wait for the last dollar when something is "growing to the sky", as Prem likes to say. But why no press release announcing the conversion of the note. :-\

I noticed this language in the FFH press release about the convertible debt and what appears to be a six month standstill agreement. Does anyone know what the terms of the standstill agreement are? Please tell me it will not affect FFH's ability to sell its BB stock here. In connection with the acquisition of the Purchased Debentures, Fairfax agreed to a “standstill” provision (the “Standstill”) as more particularly described in the early warning report to be filed by Fairfax. Fairfax has acquired the Purchased Debentures for investment purposes, and in the future, it may discuss with management and/or the board of directors of BlackBerry any of the transactions listed in clauses (a) to (k) of item 5 of Form F1 of National Instrument 62-103 – The Early Warning System and Related Take-over Bid and Insider Reporting Issues and, subject to the Standstill, it may further purchase, hold, vote, trade, dispose or otherwise deal in the securities of BlackBerry, in such manner as it deems advisable to benefit from changes in market prices of BlackBerry securities, publicly disclosed changes in the operations of Blackberry, its business strategy or prospects or from a material transaction of BlackBerry.

Soft stuff only. Partnership with Google; partnership with MunichRe and a host of other insurance companies (including Fairfax Brazil and Hudson); a deal to help digitize 3m acres in Brazil. No hard numbers seem available though.

Thanks for posting. I had not thought much of Farmers Edge before. But having spent some time on its website, it is a business that seems to have some real momentum, and is of course in a very hot space. A press release from today about a partnership with Google Cloud: https://www.farmersedge.ca/farmers-edge-partners-with-google-cloud-to-digitally-transform-agriculture/

And John Chen knows more about BB than Prem and he recently agreed to give fairfax a boatload of warrants at $6 per share for a lower interest rate.

In light of the Blackberry experience, we really need to add the Rocketship emoji to the menu here. It is very difficult to express where BB is going without it.

So at this point today over 315m shares have traded at prices between 16-19 dollars -- trading volume is 10x normal. Seems like enough volume for BB to move their 47m shares if they wanted--represents only about 15% of today's volume.

LOL: WATERLOO, ON, Jan. 25, 2021 /PRNewswire/ -- BlackBerry Limited (NYSE: BB; TSX: BB) is issuing this press release in response to a request by the Investment Industry Regulatory Organization of Canada ("IIROC") to comment on recent trading activity of its stock. The Company is not aware of any material, undisclosed corporate developments and has no material change in its business or affairs that has not been publicly disclosed that would account for the recent increase in the market price or trading volume of its common shares. It is possible this has something to do with FFH and desire to monetize? I'm probably just being hopeful

Can they really do a TRS with a bank on a stock that is going haywire and doesn't have a huge market cap? I get Exxon, but this I would imagine would be much harder to pull off, as much more complicated and difficult for bank to hedge.

Blackberry is screaming higher in pre-market trading - over $20 a share. About a 600 million paper gain for FFH. Now I REALLY hope they sell their common shares before the WSB crowd moves on.

With the stock price of Blackberry exploding higher for no real reason, I hope Fairfax takes the opportunity to take some chips off the table. They have the convertible bonds which let them participate fully in any further upside while effectively presenting no risk of a permanent impairment on the invested amount. Happy to see them ride that till the converts expire in 2023, but would be great to seem them cashing out some of the common stock as we get above $12. Recall that BB was priced at less than $3 nine months ago! The risk/reward has changed dramatically. BB has a few avenues to pay off big, and the converts will be very valuable if one of them hits, but still seems pretty risky. BB is playing in some good places (hat tip to John Chen on that), but it doesn't seem to be winning anywhere.

I think Digit is the single most exciting piece of the Fairfax empire. Certainly, the fact that their investment has gone up 17x or so in a few years is exciting. But to me even more so are: (1) The runway for future success. When you think of the penetration level in India, and future GDP growth, if the company can grow like this in a flat year, the possibilities when the wind resumes at the company's back will be very interesting. Obviously hard to say how much of the pie Digit will capture as things go forward, but it has evidenced an ability to grow fast. It is clearly winning at the customer level. (2) What Digit could mean for the broader Fairfax insurance empire. I imagine the success has turned a few heads at Fairfax. The principles that Digit is applying could be applied to Fairfax's insurance operations all over the world. Eastern Europe, Latin America, Middle East. That's both good from an offensive perspective, and a defensive perspective. If Fairfax doesn't do it, someone else will. I am hoping this lights a fire across Fairfax's insurance operations to innovate with technology. Same concept with Ki. It seems inevitable that insurance will face serious disruption in the next decade. The experience at Digit and Ki hopefully increase the odds that Fairfax will be on the right side of that disruption.

I have a bad feeling that the short position from hell is Tesla. Just a guess. If so, the losses could be brutal again. :(

I am quite relieved to see this transaction. Fairfax needed cash. Net of 200m of excess cash at the holding company, it has $500 million on its credit lines; has a dividend payment upcoming; needs to buy out OMERS stakes in various businesses; and needs to support its insurance subsidiaries capital needs during a hard market. With the recent rally in their equity holdings, and this sale, some of the clouds surrounding the company have dissipated. Fairfax always had a significant number of cards that it could have easily played if needed, but great to see it happening thus far without selling any interests in any of the core insurance subs or any fire sales.

Is this a prediction or have you seen some news? No news -- a total guess. In response to the call for predictions, I was just thinking about the one company they sold -- Davos -- and how that was a business that benefited from the pandemic, unlike most of their businesses. I was trying to think of another business that was helped by the pandemic, rather than hurt, and Pethealth is -- sadly! -- the only one I could think of. I am assuming it is done ok given the surge of interest in pets recently. Just hard for me to see them selling off many of the other businesses - such as retail - given how they must have been impacted by the virus.

Pethealth. Bought for 100m; sells for around 240m.

This vaccine news should really help Fairfax. They have so many investments that were hammered by the virus -- Eurobank; Exxon; Thomas Cook India; Bangalore Airport; Recipe restaurant business. And so few that benefited from the virus.

Great question! I see the following potential in Fairfax in 10 years: A company that writes $35 billion in premiums a year. The company achieves this through steady organic growth of 7-8% per year. Over the last ten years, the company has built roots all over the world. It harnesses it over the next 10 years by experiencing growth in areas where insurance penetration is very low (think Digit in India); and by taking what it does well in one country already and transporting it to other countries where it is already located. Sticking with the example of Digit, once it is up and running, nothing is stopping the company from taking the all digital, simple for consumers philosophy and applying it to other countries. There are hundreds of profit dials in the insurance operation that can be spread into other markets, and I believe that is exactly what Fairfax is focused on doing. Consider the value of a well disciplined underwriting operation that profitably writes 35 billion a year in insurance! I view this opportunity as the most attractive thing about an investment in Fairfax and think the odds are quite good of the company achieving a great result on the insurance side given the work that has already been done, the very long term underwriting and reserving discipline shown when companies are in the Fairfax stable, and the track record of Andy Barnard. On the other side of the house, investments, is what will determine whether Fairfax is a tremendous investment over the next 10 years, or a decent one, or a poor one. I know the company has one big thing it is favor over the next 10 years. It is structurally set up to be successful. While many institutional money managers are constrained by all kinds of issues -- short term focus of investors, "style box" constraints, and so on -- Prem has created a structure for HWIC where it can be focused on the long term and can go anyplace in any market or any region where there is value. Now it will be up to people like Wade Burton, Lawrence Chin, Quinn McLean, and Jamie Lowry to actually make good investment decisions, as opposed to being crushed by the SP500, as has happened over the last 10 years. To me, that is a wildcard. The missing ingredient at Fairfax these days -- it seems to me -- is a superstar money manager who can be trusted to oversee a 40 billion dollar portfolio, and the other money managers, for the next 20 years. Perhaps that is Wade Burton, but I have been a shareholder for a very long time that has ready every letter and listened to every call, and I couldn't tell you much about him, his philosophy, past investments or the like. This to me is the big unknown for Fairfax going forward. I will note that some of the past uncertainties around the company should not be present going forward. Prem has moved away from shorting, which takes one risk off the table. He has also moved away from buying other insurance companies in favor or organic growth, so less risk there as well. The company in my view continues to be plagued by being cash strapped and overextended at times, but if it can get past the current hump, presumably with future acquisitions and shorting curtailed, this will be less of a recurring problem in the next 10-15 years.

One other item I would add to the list is the progress at Digit Insurance. A recent start-up, but quickly becoming material. Digit is the fastest growing general insurer in India, and will write 250m-280m in premiums this year. According to this press report, Digit is currently looking to raise capital from domestic PE firms at a valuation between $800-900m. According to the report, Fairfax has invested about $140m since 2017 in Digit, and I believe they own about half of it. So a significant appreciation in Fairfax's investment already. https://timesofindia.indiatimes.com/business/india-business/pes-value-insurance-tech-startup-digit-over-800m/articleshow/72448746.cms