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Fairfax's break even share price for RIMM


nwoodman
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Given they now own 51.9m shares of RIMM,  I believe their break even to be under $20. Does anyone have a more accurate estimate as at Q3?  Thanks in advance

 

nwoodman

 

From gurufocus.com:

 

Period        Bought/Sold (Sh.)  Qtr. End Shares    Avrg. Price        Gain (%)

2010Q3      +2,065,000            2,065,000            $50.14              -79.5%

2011Q2      +6,308,300            8,373,300            $43.59              -76.5%

2011Q3      +3,425,000            11,798,300            $26.61              -61.4%

2011Q4      +1,000,000            12,798,300            $18.88              -45.7%

2012Q1      +14,050,200          26,848,500            $15.05              -31.8%

2012Q3      +25,006,200          51,854,700            $7.22                42.1%

Shares Bought: 51,854,700 Average Price: $16.98/share -40%

Average Costs 51,854,700 Average Cost: $17/share -40%

Current Price: $10.26

 

giofranchi

 

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It didn't look that bad,...and I felt watching the presentation, that it's quiet promising.

 

 

It indeed does look promising.  Heins was initially our show stopper but we think we get him now.  We picked up a very small position in RIMM when they were trading sub $7. However we have been adding to our relatively large FFH position below $370, the recent sell off making it much easier. We have come to the conclusion that RIMM can a be viable option for 3rd place which is crazy if you paid >$60/share  but works <$20/share

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Given they now own 51.9m shares of RIMM,  I believe their break even to be under $20. Does anyone have a more accurate estimate as at Q3?  Thanks in advance

 

nwoodman

 

From gurufocus.com:

 

Period        Bought/Sold (Sh.)  Qtr. End Shares    Avrg. Price        Gain (%)

2010Q3      +2,065,000            2,065,000            $50.14              -79.5%

2011Q2      +6,308,300            8,373,300            $43.59              -76.5%

2011Q3      +3,425,000            11,798,300            $26.61              -61.4%

2011Q4      +1,000,000            12,798,300            $18.88              -45.7%

2012Q1      +14,050,200          26,848,500            $15.05              -31.8%

2012Q3      +25,006,200          51,854,700            $7.22                42.1%

Shares Bought: 51,854,700 Average Price: $16.98/share -40%

Average Costs 51,854,700 Average Cost: $17/share -40%

Current Price: $10.26

 

giofranchi

 

Quoted price on the TSX yesterday hit 12.00.... Happy Thanksgiving.

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the gurufocus buy and sell prices reflect average prices for the quarter, think it would be more prudent/accurate to review the prices of each quarter and assume that fairfax purchased closer to the bottom of the quarterly ranges, which can make quite a bit of difference if the price dropped significantly during a quarter, which is exactly what happened with rimm during several quarters.....

 

regards

rijk

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prem didn't buy it to sell near term.....and if he really needed to sell he would....nothing can really stop him

 

No, he definitely did not join to sell near-term.  Otherwise he would not have joined the board.  He's in this for the long-haul...whatever the final outcome.  Cheers!

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prem didn't buy it to sell near term.....and if he really needed to sell he would....nothing can really stop him

 

 

Divided loyalty is what will stop him.  Is he more loyal to FFH shareholders who are bleeding capital from this purchase, or is he more loyal to his colleagues on the RIMM board?

 

Personally, I was happier when it was 100% clear who he was working for.

 

SJ

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prem didn't buy it to sell near term.....and if he really needed to sell he would....nothing can really stop him

 

 

Divided loyalty is what will stop him.  Is he more loyal to FFH shareholders who are bleeding capital from this purchase, or is he more loyal to his colleagues on the RIMM board?

 

Personally, I was happier when it was 100% clear who he was working for.

 

SJ

 

How are interests not aligned?  RIMM is a big investment for Fairfax and he's CEO of Fairfax and steps in to help RIMM.  Thus if he helps RIMM, he helps Fairfax. 

 

The RIMM investment is a sunk cost.  How do you get as much of your investment out of it now is the question, and that is why Prem is in there...at best he saves it, at worst some damage control.  It's clear who he is working for as he is not CEO of RIMM.  Cheers!

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prem didn't buy it to sell near term.....and if he really needed to sell he would....nothing can really stop him

 

 

Divided loyalty is what will stop him.  Is he more loyal to FFH shareholders who are bleeding capital from this purchase, or is he more loyal to his colleagues on the RIMM board?

 

Personally, I was happier when it was 100% clear who he was working for.

 

SJ

 

How are interests not aligned?  RIMM is a big investment for Fairfax and he's CEO of Fairfax and steps in to help RIMM.  Thus if he helps RIMM, he helps Fairfax. 

 

The RIMM investment is a sunk cost.  How do you get as much of your investment out of it now is the question, and that is why Prem is in there...at best he saves it, at worst some damage control.  It's clear who he is working for as he is not CEO of RIMM.  Cheers!

 

As I don't hold shares of RIMM or FFH (or really follow them, other than what I read on here) I have a question. Any board fees that Prem earns, who gets them? Do they go into Prem's pocket, or, are they going into FFH as revenue, since the only reason he is on the board, is due to his role in FFH? Or, does he work on the RIMM board for free?

 

 

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prem didn't buy it to sell near term.....and if he really needed to sell he would....nothing can really stop him

 

 

Divided loyalty is what will stop him.  Is he more loyal to FFH shareholders who are bleeding capital from this purchase, or is he more loyal to his colleagues on the RIMM board?

 

Personally, I was happier when it was 100% clear who he was working for.

 

SJ

 

How are interests not aligned?  RIMM is a big investment for Fairfax and he's CEO of Fairfax and steps in to help RIMM.  Thus if he helps RIMM, he helps Fairfax. 

 

The RIMM investment is a sunk cost.  How do you get as much of your investment out of it now is the question, and that is why Prem is in there...at best he saves it, at worst some damage control.  It's clear who he is working for as he is not CEO of RIMM.  Cheers!

 

As I don't hold shares of RIMM or FFH (or really follow them, other than what I read on here) I have a question. Any board fees that Prem earns, who gets them? Do they go into Prem's pocket, or, are they going into FFH as revenue, since the only reason he is on the board, is due to his role in FFH? Or, does he work on the RIMM board for free?

 

Was Warren Buffett's director fees at Coca-cola going into his pockets or Berkshire's general coffers?  Also, are their fees greater than their compensation or ownership at their respective companies, or significantly less? 

 

In Prem's case, his salary, dividends and ownership interest are all far higher than any compensation he receives from RIMM...not even close on any of those three metrics.  In Buffett's case, his Coca-cola director's fee was greater than his salary from Berkshire...would you say that Buffett was compromised in any manner when he served on Coca-cola's board?  The stick you guys are trying to carry is a bar held so high that hardly any CEO could pass muster over a long career...even Buffett would have failed the director's fee challenge.  Cheers!

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  • 3 weeks later...
  • 1 month later...

Looks like Prem is back to even on RIMM. Investing in handset companies has been like walking through a minefield for the last decade.It appears that the smartest strategy HAS been to just sell the heck out of who ever have been the perceived winner by MR. mkt. No one has been able to hold onto mkt leadership. The consumer has been pretty fickle.

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