1. StickyRice's Avatar
    This may not be the correct forum to post but I figured most of the BBRY bashers would be elsewhere.

    Like most investors I assume, I am somewhat underwater and have decided to roll the dice with November options.

    I am already in the money but obviously would like to be "In The Money!"

    I think there may be a slow run up to November 4th.
    What I cant find find is if there is a commitment from either Fairfax or the BBRY BOD to provide an update by or on the November 4th date.

    If Fairfax pulls out or does not provide an update I would expect the stock price to retreat.

    If we hear that another party is interested or has submitted a bid wont that happen well after the November 4th due diligence period to avoid BBRY paying a penalty?

    I think the safe play is to take some of my calls off the table during the run-up, however bad timing kills everything.

    Does anyone have insight into playing the November options?

    Thanks in advance.
    10-20-13 02:25 PM
  2. howarmat's Avatar
    lets try the stock forum

    You will find some good knowledgable people here!
    10-20-13 04:21 PM
  3. fedakd's Avatar
    Hi StickyRice!

    Contrary to what the media will lead you to believe, there ARE numerous companies interested in either all of BlackBerry, or parts of it. So far, interest has been expressed from the following companies / parties:

    - Prem Watsa (Fairfax)
    - Mike Lazaridis
    - Cerberus Capital (Private Equity)
    - SAP
    - Cisco
    - Google
    - Lenovo

    Implied volatility is increasing on Nov/Dec options as a result of all the recent news concerning interested parties (Lazaridis/Cerberus Capital/Lenovo). At $9/share the company would go for way too cheap. Lenovo knows this, so does Mike Lazaridis. Watsa knows that by taking BlackBerry private and implementing a few changes with respect to the hardware division, the company could quickly become very profitable. Again, despite what the media will try and lead you to believe, BlackBerry dominates enterprise and security.

    Personally, I think the next few weeks will heat up in a big way. Lazaridis' average cost per share is about $15. Do you think he want to give up his shares to Prem Watsa and take a huge loss? No way! Word is that Lazaridis is working with Goldman Sachs and Centerview Partners to broker a deal. Both these companies are well-known for being involved in major M&A / takeovers; they have clout if you will.

    Following the Nokia transaction, Microsoft stated that it still had interest in BBRY's enterprise division. They are weak here. What's also interesting is that we haven't heard a peep from them concerning any interest in BBRY. This is a good thing as you are more likely to here from companies that aren't interested in pursuing BBRY (Silver Lake partners) than those that are. Who knows, MSFT could also be in the hunt.

    Then you have Google, they can afford to wait and see how things play out. BBM-X could sure be useful to them for their goals of further increasing their mobile ad revenues. With the cash they have on hand, purchasing all or part of BlackBerry would be of little issue.
    There are many ways this poker game can go. I just hope the BlackBerry board of directors is doing what's in the best interest of the shareholders when they are examining potential deals. The fact that they approved a $55M package for Mr. Heins bothers me very much!

    In saying that, you can see there is no shortage of possibilities. Holding ITM options for Nov/Dec on BBRY could become very profitable in the event we see further bids from interested parties. The key questions here are, when, who, and for how much.

    GL!
    Shanerredflag likes this.
    10-20-13 06:12 PM
  4. BBNation's Avatar
    Does not bod have to decide by Nov 4th on what to do wit Pw offer.
    Options a, Pw backs out either because of other high bidders, no financing or his intent to drive other bids.
    Options b, by Nov 4th Pw decided to go ahead with odder and bod accepts it as they do not have any other bid or interest that is firm.

    Also bos doesn't want to face shareholders at the next earning so I think decision is coming by Nov 4th.

    Posted via CB10
    10-20-13 06:46 PM
  5. StickyRice's Avatar
    Fedakd

    I agree with everything you have said and understand the players to be in the same position.

    What I don't know is if there is anything in the Fairfax LOI that sets a hard date on or before November 4th.

    Does the BOD need to respond publicly on November 4th.

    It would be helpful to understand any requirements and time frames, especially with options.
    10-20-13 07:06 PM
  6. fin2007's Avatar
    If there is a bid higher than $9, then it has to come before Nov.4, otherwise if PW signs the definitive agreement on Nov.4 at $9, the other buyers have to pay 50cents to PW instead of 30cents. I do not think any other bidder really need more than 1 month to look at BBRY's book.

    As right now all the other big players they do not need find finance at all, even lenovo has 3+ Billions cash on hand, needless to say other big guys. The only interested need find finance are PW and Mike L.

    Or there is no bidder before Nov.4, and PW could not find finance on Nov.4, then someone could kick in a lower or similar offer between $8-$9, say from Cerberus.

    Either way, if there is an offer higher than $9, that offer has to come before Nov.4. It is that simple.
    10-20-13 07:29 PM
  7. rim4ever's Avatar
    Take a look at the official press release here:

    BlackBerry Enters into Letter of Intent with Consortium led by Fairfax Financial - Press Releases

    In particular,

    Diligence is expected to be complete by November 4, 2013 (Diligence Period). The parties intention is to negotiate and execute a definitive transaction agreement by such date. During such period, BlackBerry is permitted to actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals (Alternative Transactions).
    I am not sure that the BOD must act by November 4th even though there is an intention to do so.
    fedakd likes this.
    10-20-13 09:02 PM
  8. StickyRice's Avatar

    I am not sure that the BOD must act by November 4th even though there is an intention to do so.
    I think you hit the nail on the head here. While the intention to wrap this up by November 4th is well and good, there are no firm dates that the BOD must act by.

    Still not sure how to play the options here but assume a run up toward the 4th of November or sooner based on any news. If we hit the 4th without news I assume the share price will move down quickly with the assumption that Fairfax has pulled out and no one else is interested.
    Last edited by StickyRice; 10-20-13 at 09:39 PM.
    10-20-13 09:28 PM
  9. BBNation's Avatar
    I think you hit the nail on the head here. While the intention to wrap this up by November 4th is well and good, there are no firm dates that the BOD must act by.

    Still not sure how to play the options here but assume a run up toward the 4th of November or sooner based on any news. If we hit the 4th without news I assume the share price will move down quickly with the assumption that Fairfax has pulled out and no one else is interested.
    But if PW offers $9 bucks before Nov 4th then the BOD must decide whether to accept it or reject the offer by Nov 4th unless firm bid allows more time to decide. I do not think BOD wants to drag this for as they want to remove the uncertainty and face shareholders at the next earning. They want next earning call just like previous one, no call. just results over web and filing..

    I think SP will run up bit from here before Nov 4th and either it will shoot up to $10-12 as other bidders will offer that price or it will tank to $6-7 if PW do not offfer or lowers the bid. I think PW's offer is firm with financial backing as he said that he has more than he needs. He is just testing the waters without committing another $5 billion if he can recover his investment.
    10-21-13 12:33 AM
  10. silversun10's Avatar
    This may not be the correct forum to post but I figured most of the BBRY bashers would be elsewhere.

    Like most investors I assume, I am somewhat underwater and have decided to roll the dice with November options.

    I am already in the money but obviously would like to be "In The Money!"

    I think there may be a slow run up to November 4th.
    What I cant find find is if there is a commitment from either Fairfax or the BBRY BOD to provide an update by or on the November 4th date.

    If Fairfax pulls out or does not provide an update I would expect the stock price to retreat.

    If we hear that another party is interested or has submitted a bid wont that happen well after the November 4th due diligence period to avoid BBRY paying a penalty?

    I think the safe play is to take some of my calls off the table during the run-up, however bad timing kills everything.

    Does anyone have insight into playing the November options?

    Thanks in advance.
    November is a bit early days, the auction only starts on Nov 4th when FF make their bid firm. So, for options my guess is the earliest you want to go is December to let the auction or bidding war unfold
    10-21-13 09:44 AM

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