[lc474]

if Fairfax is paying 4.7 billion for the company, and the company has 2.5 billion in cash, does this mean their total investment is really $2.2 billion at the end of the day, since they will own that cash, as they will the other assets???

[tryfe]

Also Fairfax has about a 10% stake in the company already..

[gordon griffith]

I believe that is the case, and with the 10% they already own taken into account (470 million approx) they are effectively paying 1.7B. Pretty sweet deal if they ever decide to part it out or just sell the patents which have been valued from 2 - 5 billion. He's one shareholder that's not coming out on the short end of the stick.

Posted via CB10

[cgr1971]

I believe that is the case, and with the 10% they already own taken into account (470 million approx) they are effectively paying 1.7B. Pretty sweet deal if they ever decide to part it out or just sell the patents which have been valued from 2 - 5 billion. He's one shareholder that's not coming out on the short end of the stick.

Posted via CB10

If thats the way it works out, they will make out pretty well

[The Big Picture]

And some people are saying that Prem may have trouble financing this deal. 1.7billion is not much for fairfax international. Utter nonsense

Q10-Z10-iP5

[blurredspam]

Maybe you children should do some research first. Fairfax bought the majority of their shares at the $50 mark, and including the more recent purchases and dilution from adding more investors to the purchase will still be averaged in the high teens. They need the stock to increase in value or purchase prices for sectors to be fairly high to recoup their investments.
They are buying the company to protect their investment.

Posted via CB10

[Cashgap]

New buyer understands that as currently configured, thecash will be burnt in operations covering future losses, inventory writedowns, severances, etc. So they have to see some portion of that cash as "gone" by they time they can execute on their plan, whatever that plan may be.

They can't realistically expect to reverse cash flow in an instant. It might take a quarter to gain control, how much cash will remain?

[Gunner24]

New buyer understands that as currently configured, thecash will be burnt in operations covering future losses, inventory writedowns, severances, etc. So they have to see some portion of that cash as "gone" by they time they can execute on their plan, whatever that plan may be.

They can't realistically expect to reverse cash flow in an instant. It might take a quarter to gain control, how much cash will remain?

Inventory write downs are non-cash losses

Posted from my Q10 on the West Coast