Auction Buyback Announced

[Daphne]

After having to raise cash for the auction it’s unlikely to have that much is reserve

 

Quote

 

[valuesource]

23 hours ago, Phoenix01 said:

Fairfax might have bought more TRS and the counter party might be covering their exposure.  We will find out in a couple of weeks...

 FFH Should report on Feb 10th.  That is the Thrusday, so if it's not Feb 10th, I figure it will be the following Thurs Feb 17th. Yet to be announced.  They have some flexibility.

[TwoCitiesCapital]

47 minutes ago, valuesource said:

 FFH Should report on Feb 10th.  That is the Thrusday, so if it's not Feb 10th, I figure it will be the following Thurs Feb 17th. Yet to be announced.  They have some flexibility.

Would honestly hope against another TRS bet and just a large NCIB. 

 

TRS wass brilliant at the time, but at some point it's too much of a good thing. If the stock gets back down to sub-$400 and they need quick cash and to take out large value? Fine. 

 

But otherwise, the potential negative reflexivity is terrible. Having to post additional cash while the stock is cratering could be problematic. Also, could force them OUT of the position or prevent them from buying other opportunities at the time. 

 

 This is in part why the short-swaps position was so detrimental to them. Every quarter they needed to liquidate stuff that was working to continue to pay out in TRS-shorts that weren't. Would hate to see that work in reverse on their own stock. 

 

Great at the time, but no need for financial engineering again. Don't get fancy with it, just buy back 5-10% of shares every year until the discount closes. 

[glider3834]

46 minutes ago, TwoCitiesCapital said:

Would honestly hope against another TRS bet and just a large NCIB. 

 

TRS wass brilliant at the time, but at some point it's too much of a good thing. If the stock gets back down to sub-$400 and they need quick cash and to take out large value? Fine. 

 

But otherwise, the potential negative reflexivity is terrible. Having to post additional cash while the stock is cratering could be problematic. Also, could force them OUT of the position or prevent them from buying other opportunities at the time. 

 

 This is in part why the short-swaps position was so detrimental to them. Every quarter they needed to liquidate stuff that was working to continue to pay out in TRS-shorts that weren't. Would hate to see that work in reverse on their own stock. 

 

Great at the time, but no need for financial engineering again. Don't get fancy with it, just buy back 5-10% of shares every year until the discount closes. 

Another sub selldown and SIB would also likely increase existing TRS swap position value. 

 

 

[Xerxes]

Just an opinion:

 

I always thought of the TRS swap position as an accelerator. But that accelerator needs jet fuel. We had a few buckets of jet fuel: (1) bounce back of the underlying BV which usually lags, (2) news related to Digit and the hidden value and (3) the tender offer itself.

 

Is there a #(4) bucket of jet fuel somewhere ?

 

I doubt it. Keeping the TRS position now seems counter productive, given its +/- need for cash outlay that it generates on a quarterly basis. Either way, it was good of them to put in place when the did, but has the risk/reward ratio been tilted now ? 

 

When they close it up. Hopefully they ll be clear on much they made on it.

[Viking]

3 hours ago, TwoCitiesCapital said:

Would honestly hope against another TRS bet and just a large NCIB. 

 

TRS wass brilliant at the time, but at some point it's too much of a good thing. If the stock gets back down to sub-$400 and they need quick cash and to take out large value? Fine. 

 

But otherwise, the potential negative reflexivity is terrible. Having to post additional cash while the stock is cratering could be problematic. Also, could force them OUT of the position or prevent them from buying other opportunities at the time. 

 

 This is in part why the short-swaps position was so detrimental to them. Every quarter they needed to liquidate stuff that was working to continue to pay out in TRS-shorts that weren't. Would hate to see that work in reverse on their own stock. 

 

Great at the time, but no need for financial engineering again. Don't get fancy with it, just buy back 5-10% of shares every year until the discount closes. 

Agreed. Especially if we get a CR that comes in under 96 on average in 2022. Operating earnings coming in each quarter should be able to take out a nice slug of shares under the NCIB. Sometimes hitting a couple of consecutive singles gets the base runner across home plate too.