Guest wellmont Posted August 21, 2013 Share Posted August 21, 2013 I like FRFHF at 1.1 P/B. But if Prem takes BBRY private, isn't the market reaction likely negative? (Markel bought Alterra and MKL dropped 10%.) Buy now at a fair price or wait until BBRY's future resolved? it looks like this may be a team canada effort. so it won't just be pw taking on all the risk. and it depends on price. my guess is he is going to wait until things get bad in the headlines. then make his move and try to pull a msd and buy the thing at liquidation value. even if he does this is going to be extremely messy for anybody that takes bbry on. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted August 22, 2013 Share Posted August 22, 2013 I've said this before, and will say it again: I think Prem would've had nearly zero interest in this company if it wasn't in Canada. Maybe I'll end up being wrong, but it seems like Prem has continued digging a giant hole with this company to avoid admitting he was completely wrong and moving on. agree 100%. even the greatest investors are not automatons. there is no way he would have taken a big stake in this technology company without personal relationships being front and center. I think shareholders have to learn not to separate the CEO from his own soul. Anyone with good conscious, and I'm betting you all expect your CEO's to have good conscious instead of being psychopaths, would agree that sometimes there are battles to be fought that extend beyond the basic role of the CEO. Otherwise why would Prem or Buffett even entertain things like "The Hospital For Sick Children", "Planned Parenthood", "The Gates Foundation", or "The Glide Foundation"? In fact, why even do big shin-dig AGM's like they do? You guys should be treated like Leucadia Shareholders...just an hour of their time every year! Of course personal stances will play a role at times in their investments and behavior. Buffett ran Salomon's because he had to save the investment. This happens and it's nothing new. RIM is a relatively small investment in the grand scheme of things...Salomon's could have taken Berkshire out if Buffett had not stepped in. Cheers! It may be a relatively small investment financially, but it sure seems like its taking up a good amount of his time. Investors need to take their emotions out of investing, and it seems like Prem has not been doing this the last few years. He comes up with theses (like his expectation of deflation he's been preaching for the last 6 or so years) and seems to not want to admit he's wrong and move on. I think this is disingenuous. 1) He bought deflation hedges with a maturity of 10 years for a reason. It hasn't been 10 years yet so it's hard to say he's absolutely wrong on these - no? Secondly, it was to hedge his business - not necessarily to maximize investment gains. As I recall it took years for him to be "right" on the CDS too, but that protected Fairfax from the financial crisis AND provided huge profits. I'm not saying that it will happen again, but I think it's clear from U.S. GDP coming in at 1% in Q1 despite a "recovering housing market" and trillions in stimulus that there is still a very real deflationary threat. Same could be said for your Europe if we see another spike in interest rates like we did in 2011 where the borrowing costs of Italy and others nearly doubled in the span of weeks. As Prem is fond of pointing out - it took years for Japan to experience deflation. These aren't events that occur overnight. They're long-term secular trends. 2) On Blackberry, just because he was wrong to invest at $40 doesn't mean he was wrong to double down at $7, nor does it mean he's emotionally attached to have done so. By becoming involved (and by buying at such a cheap price) he had the potential to mitigate the losses from the original investments and possibly turn a profit. In a sense, he was limiting his downside while amplifying his upside. It wasn't that long ago that BBRY was pushing over $1B in FCF a year. Right now it sports an EV of just $2B. If it ever recovers to some sustainable shadow of it's former self, it will be seen that Prem got a ridiculous price for the company at $7 and probably a good price at his average of $17. If the company fails, chances are he still makes money on the shares bought at $7 and he was able to mitigate the losses with some small gains while retaining upside potential. I don't see how this equates to being emotionally attached...the liquidation value of the company is quite clearly more than $7 and probably more than the $10 it trades at. How do you get a liquidation value of $7? And how is Prem going to buy the company at $7? I think you misread my comment - I said chances are he'd make money on his investment at $7 (when he doubled down to 10% ownership in 2012) in a liquidation scenario. I didn't suggest liquidation was only $7. I think it's between $12-15 if cash burn is kept at an acceptable rate and were to do so relatively soon. Link to comment Share on other sites More sharing options...
Guest valueInv Posted August 22, 2013 Share Posted August 22, 2013 How do you get a liquidation value of $12-$15? Link to comment Share on other sites More sharing options...
BargainValueHunter Posted August 22, 2013 Share Posted August 22, 2013 Forbes Rips Watsa: http://www.forbes.com/sites/moneybuilder/2013/08/22/prem-watsas-blackberry-nightmare-what-can-we-learn/ Roughly half of Watsa’s BBRY purchases were made at “going out of business” prices in the $7.00-$8.00 dollar per share range, giving him gains of 20%-30% on those lots. But his initial purchases back in 2010 were at an average cost over $50.00…making him down nearly 80% at current prices. The current value of Watsa’s BlackBerry position is around $570 million. His cost basis? Nearly $900 million. What lessons can we learn from this? Link to comment Share on other sites More sharing options...
Guest longinvestor Posted August 23, 2013 Share Posted August 23, 2013 Forbes Rips Watsa: http://www.forbes.com/sites/moneybuilder/2013/08/22/prem-watsas-blackberry-nightmare-what-can-we-learn/ Roughly half of Watsa’s BBRY purchases were made at “going out of business” prices in the $7.00-$8.00 dollar per share range, giving him gains of 20%-30% on those lots. But his initial purchases back in 2010 were at an average cost over $50.00…making him down nearly 80% at current prices. The current value of Watsa’s BlackBerry position is around $570 million. His cost basis? Nearly $900 million. What lessons can we learn from this?[/quote] Nothing, yet! Link to comment Share on other sites More sharing options...
alertmeipp Posted August 23, 2013 Share Posted August 23, 2013 who haven't lose any money, let me know. Link to comment Share on other sites More sharing options...
james22 Posted August 23, 2013 Share Posted August 23, 2013 ...one thing that is clear is Watsa has bet big on BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) and failed. http://www.valuewalk.com/2013/08/prem-watsas-blackberry-ltd-bbry-investment/ Yeah, pretty sure the market won't like Prem extending his bet. Link to comment Share on other sites More sharing options...
gfp Posted August 23, 2013 Share Posted August 23, 2013 you've got to love that article's fact checking.. "owns a majority of BlackBerry shares, at around 10% of the company's outstanding shares", "Percentage of Blackberry in the Fairfax portfolio is 28%".... I'm no mathematician but I thought FFH had a pretty large investment portfolio relative to their BBRY position.. Link to comment Share on other sites More sharing options...
Guest wellmont Posted August 23, 2013 Share Posted August 23, 2013 you've got to love that article's fact checking.. "owns a majority of BlackBerry shares, at around 10% of the company's outstanding shares", "Percentage of Blackberry in the Fairfax portfolio is 28%".... I'm no mathematician but I thought FFH had a pretty large investment portfolio relative to their BBRY position.. he is probably focused on % of his Equity portfolio, not his entire portfolio. Link to comment Share on other sites More sharing options...
wknecht Posted August 23, 2013 Share Posted August 23, 2013 you've got to love that article's fact checking.. "owns a majority of BlackBerry shares, at around 10% of the company's outstanding shares", "Percentage of Blackberry in the Fairfax portfolio is 28%".... I'm no mathematician but I thought FFH had a pretty large investment portfolio relative to their BBRY position.. Think these are the correct figures at June 30: 12% of the equity portfolio (541mm/4.7b), and 2% of the overall portfolio (541mm/24b). Still about 7% of BVPS, so will sting a bit if it heads towards zero. That could all change soon though if a deal of some kind is made. Link to comment Share on other sites More sharing options...
james22 Posted September 9, 2013 Share Posted September 9, 2013 A TYCOON known as Canada’s Warren Buffett is closing in on a rescue deal for BlackBerry, the beleaguered mobile phone maker. Prem Watsa, an Indian-born chemical engineer who has become one of Canada’s most successful investors, has assembled billions in backing from the country’s biggest pension funds for a bid. BlackBerry hoisted the “for sale” sign last month. http://www.thesundaytimes.co.uk/sto/business/Tech_and_Media/article1310844.ece Shares down .24% at the open from up 2% after-hours. Link to comment Share on other sites More sharing options...
alertmeipp Posted September 9, 2013 Share Posted September 9, 2013 interesting, the question now is how much? 15? Link to comment Share on other sites More sharing options...
james22 Posted September 10, 2013 Share Posted September 10, 2013 Pension funds cool to BlackBerry buyout overtures http://www.bnn.ca/News/2013/9/10/Pension-funds-cool-to-BlackBerry-buyout-overtures-Report.aspx Link to comment Share on other sites More sharing options...
Guest valueInv Posted September 20, 2013 Share Posted September 20, 2013 As I understand it, investment decisions are made by a HW committee with Prem having veto power. I believe their BBM is being given away for free, therefore no revenue. As far as the business goes, they have been on a downward spiral so far but yesterday's earnings puts them in a tailspin. I'll try to write a more detailed post later. I don't own BBRY, but after reading the report yesterday, I'm not sure how anyone can write off BBRY after one quarter's worth of data. They are in tough to be sure, and the outcome is unlikely to be good relative to the competition's size and dominance, but I think you need to look at least a year's worth of data, sales, and development to come to any accurate conclusion about whether this attempt at a turnaround will be successful or not. Those that are always "certain" tend to be oblivious to life's uncertainties! Cheers! 1, This is not unexpected information, we have been watching this stock for years. 2, It is not just this quarters numbers, they have forecast an operating loss for next quarter. 3, They will no longer be releasing subscriber numbers which means those numbers will continue to decline. 4, It is on enough just to look at numbers for a year, it is important to understand what those numbers mean. 5, You can always tell who is "certain" by the amount of predictions they make. 1, Investors have been watching Apple for years, but the last year and a half have not been one of glory...that doesn't mean Apple is finished. 2, They've pretty much scrapped much of the business plan for the past decade, and gone in a completely different direction...it's reasonable to assume that they will go through quarters of losses? 3, Probably because they are trying to focus on the longer term, not quarter by quarter. 4, I doubt if Apple's business plan in the first year Jobs took over the 2nd time around was anything but painful...look what happened there. 5, You are most correct here, and there have been more than enough predictions by pretty much everyone...the Apple thread is pretty much indicative of that! As I mentioned earlier, I don't own BBRY and do own APPL. But any supposition from a quarter's worth of numbers smack of hubris. Cheers! Hubris, indeed: http://www.bloomberg.com/news/2013-09-20/blackberry-to-fire-4-500-write-down-up-to-960-million.html People who work in an industry have a deep understanding of it. They know how to read between the lines. Thinking otherwise is hubris. People in the industry know how the buying process works. knew that as soon RIM announced bad earnings, operators and companies would stop investing in RIM's gear. If you are a CIO and you deployed RIM companywide, then RIM shutdown the product, that would be the end of your career. Industry insiders know that. Simply looking at financials and plotting trend lines is not enough. Link to comment Share on other sites More sharing options...
Parsad Posted September 20, 2013 Share Posted September 20, 2013 As I understand it, investment decisions are made by a HW committee with Prem having veto power. I believe their BBM is being given away for free, therefore no revenue. As far as the business goes, they have been on a downward spiral so far but yesterday's earnings puts them in a tailspin. I'll try to write a more detailed post later. I don't own BBRY, but after reading the report yesterday, I'm not sure how anyone can write off BBRY after one quarter's worth of data. They are in tough to be sure, and the outcome is unlikely to be good relative to the competition's size and dominance, but I think you need to look at least a year's worth of data, sales, and development to come to any accurate conclusion about whether this attempt at a turnaround will be successful or not. Those that are always "certain" tend to be oblivious to life's uncertainties! Cheers! 1, This is not unexpected information, we have been watching this stock for years. 2, It is not just this quarters numbers, they have forecast an operating loss for next quarter. 3, They will no longer be releasing subscriber numbers which means those numbers will continue to decline. 4, It is on enough just to look at numbers for a year, it is important to understand what those numbers mean. 5, You can always tell who is "certain" by the amount of predictions they make. 1, Investors have been watching Apple for years, but the last year and a half have not been one of glory...that doesn't mean Apple is finished. 2, They've pretty much scrapped much of the business plan for the past decade, and gone in a completely different direction...it's reasonable to assume that they will go through quarters of losses? 3, Probably because they are trying to focus on the longer term, not quarter by quarter. 4, I doubt if Apple's business plan in the first year Jobs took over the 2nd time around was anything but painful...look what happened there. 5, You are most correct here, and there have been more than enough predictions by pretty much everyone...the Apple thread is pretty much indicative of that! As I mentioned earlier, I don't own BBRY and do own APPL. But any supposition from a quarter's worth of numbers smack of hubris. Cheers! Hubris, indeed: http://www.bloomberg.com/news/2013-09-20/blackberry-to-fire-4-500-write-down-up-to-960-million.html People who work in an industry have a deep understanding of it. They know how to read between the lines. Thinking otherwise is hubris. People in the industry know how the buying process works. knew that as soon RIM announced bad earnings, operators and companies would stop investing in RIM's gear. If you are a CIO and you deployed RIM companywide, then RIM shutdown the product, that would be the end of your career. Industry insiders know that. Simply looking at financials and plotting trend lines is not enough. I don't own BBRY, but do own AAPL. Funny how I got that right, since I'm not in the industry and don't know how the buying process works. You are correct, hubris indeed! Cheers! Link to comment Share on other sites More sharing options...
alertmeipp Posted September 20, 2013 Share Posted September 20, 2013 interesting, the question now is how much? 15? 10? LOL I actually bought some. Wonder how much cash they burn last Q. Paying $3.5 (net cash) for the everything with Prem trading a pull off a deal seems not a bad bet. What a screw up for Prem. Link to comment Share on other sites More sharing options...
plato1976 Posted September 20, 2013 Share Posted September 20, 2013 I am wondering how much the liquidation will cost... seems a good bet if it sinks to the $7 level interesting, the question now is how much? 15? 10? LOL I actually bought some. Wonder how much cash they burn last Q. Paying $3.5 (net cash) for the everything with Prem trading a pull off a deal seems not a bad bet. What a screw up for Prem. Link to comment Share on other sites More sharing options...
fareastwarriors Posted September 23, 2013 Share Posted September 23, 2013 I hope Fairfax trades sub 400 on the news of BBRY acquisition. Link to comment Share on other sites More sharing options...
DynamicPerception Posted September 23, 2013 Share Posted September 23, 2013 A chance to buy would be nice. Link to comment Share on other sites More sharing options...
A_Hamilton Posted September 23, 2013 Share Posted September 23, 2013 Anybody know what the maximum Prem and Co. have mentioned as a % of shareholders' equity that they would be willing to put into one name? I thought BBRY was already near/at the maximum. Link to comment Share on other sites More sharing options...
cogitator99 Posted September 24, 2013 Share Posted September 24, 2013 From what I've read, FFH won't be putting in more money but will simply roll over its 10% stake. Which raises the question, who are the other investors? Also, there are break-up fees to the deal. $157 mn or so if BBRY walks away, higher if they walk away after signing a definitive agreement. Given about 60% of market cap is cash it's not so bad, but they don't have a lot of time. They have to get the burn under control. It would be nice if Watsa can get Lazaridis on board here as well. Link to comment Share on other sites More sharing options...
cogitator99 Posted September 24, 2013 Share Posted September 24, 2013 Fairfax to take BlackBerry private in $4.7B deal. BlackBerry (BBRY) has signed a letter of intent to be acquired by a consortium led by Prem Watsa's Fairfax Financial for $9/share in cash, or $4.7B. Fairfax will merely roll over its existing 9.9% stake into its buyout offer, and won't invest any more cash. Prem Watsa told Bloomberg his firm will rely on other investors to finance the rest of the deal via equity and debt. The consortium is described as "in flux," and BBRY is free to look at competing bids until due diligence is completed. Link to comment Share on other sites More sharing options...
nwoodman Posted September 24, 2013 Share Posted September 24, 2013 Fairfax to take BlackBerry private in $4.7B deal. BlackBerry (BBRY) has signed a letter of intent to be acquired by a consortium led by Prem Watsa's Fairfax Financial for $9/share in cash, or $4.7B. Fairfax will merely roll over its existing 9.9% stake into its buyout offer, and won't invest any more cash. Prem Watsa told Bloomberg his firm will rely on other investors to finance the rest of the deal via equity and debt. The consortium is described as "in flux," and BBRY is free to look at competing bids until due diligence is completed. Another word starting with "f" springs to mind. At least Prem is holding to his word and won't sink more cash into the deal. Thanks for posting as this was my biggest worry cheers nwoodman Link to comment Share on other sites More sharing options...
giofranchi Posted September 24, 2013 Share Posted September 24, 2013 Fairfax to take BlackBerry private in $4.7B deal. BlackBerry (BBRY) has signed a letter of intent to be acquired by a consortium led by Prem Watsa's Fairfax Financial for $9/share in cash, or $4.7B. Fairfax will merely roll over its existing 9.9% stake into its buyout offer, and won't invest any more cash. Prem Watsa told Bloomberg his firm will rely on other investors to finance the rest of the deal via equity and debt. The consortium is described as "in flux," and BBRY is free to look at competing bids until due diligence is completed. Another word starting with "f" springs to mind. At least Prem is holding to his word and won't sink more cash into the deal. Thanks for posting as this was my biggest worry cheers nwoodman Yes! This is very important! And let me breathe a sigh of relief! ;) giofranchi Link to comment Share on other sites More sharing options...
jeffmori7 Posted September 24, 2013 Share Posted September 24, 2013 In french : http://www.lesaffaires.com/blogues/bernard-mooney/mooney-le-probleme-avec-prem-watsa/561730#.UkGe64bTt8E Mooney accusing Watsa of being arrogant and not able to recognize an error, in part due to past succes... Link to comment Share on other sites More sharing options...
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