1. allisos's Avatar
    Fairfax entry point on BB is somewhere around $17 per share.... They own approximately 54 million shares.

    They will get $0.30 per share if they don't match. That's $157 million.

    To break even, they would need a buyer somewhere around the $14 per share range. At 14, the stock sale would be around $750 million + $157 million from the letter of intent clause.... That would be just over $900 million.

    Their entry point.... 17 * 54 million = approx $918 million. Fairfax is in this to make money. Simple. Any offer under $14 will be matched. I'm willing to bet this was a play to get an unknown bidder up from say 12 or 13 to 15.
    09-24-13 01:34 PM
  2. undone's Avatar
    They mentioned something on Bloomberg yesterday about this being a play to stem the stock price bleed that was happening.
    09-24-13 01:46 PM
  3. allisos's Avatar
    And another thought is that bbm was withdrawn so they could hold any positive spin news until after the quarterly report. After all... if Fairfax is going to most likely buy the company, and it is not likely anyone will bid that high... why post positive news like BBM growth, and potential increase in net worth of the company? It would be bad for the company, as more money would be spent acquiring the company, and in financing charges, rather than being put into the company. Fairfax only needs to finance what they don't already own... and technically they are buying cash, so some debt could be washed out instantly. You have a company, that without a billion dollar right down, practically broke even this quarter. It will be profitable soon. They own $900 million of a $4.7 billion dollar offer. So they need $3.8 billion. They are buying $2.6 billion in cash. They will get bb for $1.2 billion additional funds. All this without Mike L joining in.... If the price of the company gets driven up by bidders, it means less money to develop bb. The worst thing to happen would be a sale for between 10-13... 14 and above, Fairfax steps aside, and someone will look to get a return on their investment.
    09-24-13 01:54 PM
  4. JasW's Avatar
    I've little doubt a large part of this was the desire to put a floor (for now) on the share price. But Fairfax has no obligation to go through with the deal. It's not just that it has to be satisfied after going through due diligence, it's also that it needs to get financing. Fairfax owns 10% of BBRY's shares, so any lender is going to require a sh!t ton of equity. Fairfax can't do this alone, it's got to find someone to go in on this with them and convince a lender.

    A lot of people are talking about this as if it's a done deal, when the truth of the matter is that it's far from that. The whole thing could fall through and shareholders are left with virtually nothing.
    09-24-13 02:00 PM
  5. undone's Avatar
    The BBM thing I am not so sure about. I don't think it was something they where controlling to match up with the stock shock. Also they released the corporate press release early because someone was leaking information, so they needed to make all the info available to all parties.

    The one thing that will happen is a fire sale on the written off Z10 inventory. Sell it straight for cost and realize no additional debt. Probably after Friday.
    09-24-13 02:07 PM
  6. undone's Avatar
    I've little doubt a large part of this was the desire to put a floor (for now) on the share price. But Fairfax has no obligation to go through with the deal. It's not just that it has to be satisfied after going through due diligence, it's also that it needs to get financing. Fairfax owns 10% of BBRY's shares, so any lender is going to require a sh!t ton of equity. Fairfax can't do this alone, it's got to find someone to go in on this with them and convince a lender.

    A lot of people are talking about this as if it's a done deal, when the truth of the matter is that it's far from that. The whole thing could fall through and shareholders are left with virtually nothing.
    Yea and the way the stock is trading people are still doubting it will happen. So a lot of more concrete answers have to happen to make this believable on a lot of levels.
    09-24-13 02:08 PM
  7. allisos's Avatar
    The inventory of phones, which is now valued at 0 dollars on the books, may be given away to BES clients to speed the adoption rate of BES10, and to circumvent the customers that won't change because they can't afford to replace all of their bb 7 phones.

    I've little doubt a large part of this was the desire to put a floor (for now) on the share price. But Fairfax has no obligation to go through with the deal. It's not just that it has to be satisfied after going through due diligence, it's also that it needs to get financing. Fairfax owns 10% of BBRY's shares, so any lender is going to require a sh!t ton of equity. Fairfax can't do this alone, it's got to find someone to go in on this with them and convince a lender.

    A lot of people are talking about this as if it's a done deal, when the truth of the matter is that it's far from that. The whole thing could fall through and shareholders are left with virtually nothing.
    09-24-13 02:25 PM
  8. allisos's Avatar
    If you were Prem, wouldn't you do everything in your power to make sure you didn't lose your $900,000,000 investment?

    Yea and the way the stock is trading people are still doubting it will happen. So a lot of more concrete answers have to happen to make this believable on a lot of levels.
    09-24-13 02:29 PM
  9. heymaggie's Avatar
    All we know is that the Warren Buffet of Canada is saying "I will give you $9 per share in 6 weeks for this stock" and the market says "Nah, I'll take $8.56 right now". LOL.
    FSeverino likes this.
    09-24-13 02:32 PM
  10. undone's Avatar
    If you were Prem, wouldn't you do everything in your power to make sure you didn't lose your $900,000,000 investment?
    Of course, but as it stands today there is little detail over how this will be financed and who is in this group he has formed. Remember he can get out of this as well. Its just not set in stone yet, but I think he is going to be BlackBerry's best bet for a future.
    09-24-13 02:51 PM
  11. FSeverino's Avatar
    The inventory of phones, which is now valued at 0 dollars on the books, may be given away to BES clients to speed the adoption rate of BES10, and to circumvent the customers that won't change because they can't afford to replace all of their bb 7 phones.
    What if the zero value is then sold for profit?
    In other words, what if they wrote down the phones to lower the average share cost to make it easier for Fairfax to buy, then Fairfax uses those phones to regain some market share, especially in BES?

    Posted via CB10
    09-24-13 04:10 PM
  12. playbookster's Avatar
    They mentioned something on Bloomberg yesterday about this being a play to stem the stock price bleed that was happening.
    Who is they?

    Posted via CB10
    09-24-13 04:17 PM
  13. allisos's Avatar
    What if the zero value is then sold for profit?
    In other words, what if they wrote down the phones to lower the average share cost to make it easier for Fairfax to buy, then Fairfax uses those phones to regain some market share, especially in BES?

    Posted via CB10
    If the zero value is sold, a profit is realized. If that is what indeed happened, I'm not sure of its legality, but it would certainly make it easier to report larger make share numbers by giving phones away or selling them cheaply.

    Posted via CB10
    09-24-13 04:33 PM
  14. FSeverino's Avatar
    If the zero value is sold, a profit is realized. If that is what indeed happened, I'm not sure of its legality, but it would certainly make it easier to report larger make share numbers by giving phones away or selling them cheaply.

    Posted via CB10
    Most likely they won't sell for profit... they will seed them like they did with the playbook. but either way it is an advantage for FF bc they didn't have to pay for the phones

    Posted via CB10
    09-24-13 04:36 PM
  15. m1a1mg's Avatar
    It shouldn't say speculation, as that would be based on some version of reality. This thread is a pure dream. BBRY is going down, not up. Do you think people would be stupid enough to fall for this. All of the "experts" on CNBC said that $9 was too high. Only dreamers are talking about anything over $10.
    09-24-13 04:38 PM
  16. allisos's Avatar
    It shouldn't say speculation, as that would be based on some version of reality. This thread is a pure dream. BBRY is going down, not up. Do you think people would be stupid enough to fall for this. All of the "experts" on CNBC said that $9 was too high. Only dreamers are talking about anything over $10.
    Experts on TV said so... it must be true.

    Posted via CB10
    FSeverino likes this.
    09-24-13 04:42 PM
  17. m1a1mg's Avatar
    Experts on TV said so... it must be true.

    Posted via CB10
    At least they have some experience to base their opinions. You?
    09-24-13 04:43 PM
  18. allisos's Avatar
    At least they have some experience to base their opinions. You?
    Anything I say is only my word, and I would not presume to publicly admit who I am, or my own experiences. I made my opinion based on math, and a successful history in business. I respect your opinion to disagree. I also would encourage you to support your own insight with a more elaborate explanation of the logic leading to your conclusions. That would be the most reliable way to influence my opinion.


    Posted via CB10
    09-24-13 04:50 PM
  19. m1a1mg's Avatar
    So utterly simple, you will appreciate it's brilliance.

    The stock is trading at $8.53 AFTER a $9 offer. You know why? Because everyone who IS NOT a member of Crackberry knows that the stock is heading down. After Friday, when we find out how much cash they really have, along side their obligations, $8.53 will seem like a lot.
    molson0 likes this.
    09-24-13 06:07 PM
  20. the_sleuth's Avatar
    It's all about ROI on this deal. I have read that Ontario Teacher's Pension Plan is interested. It has over $127 Billion assets under administration. There might be other pension plans interested in the debt.

    Regardless, Fairfax efforts would be futile without a strategic partner in the smartphone industry or tech firm with deep pockets as $2.6 Billion can burn quickly in layoff expenses and R&D to develop new products / services. In my opinion, there will be more layoffs to shrink BlackBerry to profitability to make the ROI numbers work on the deal.

    I've little doubt a large part of this was the desire to put a floor (for now) on the share price. But Fairfax has no obligation to go through with the deal. It's not just that it has to be satisfied after going through due diligence, it's also that it needs to get financing. Fairfax owns 10% of BBRY's shares, so any lender is going to require a sh!t ton of equity. Fairfax can't do this alone, it's got to find someone to go in on this with them and convince a lender.

    A lot of people are talking about this as if it's a done deal, when the truth of the matter is that it's far from that. The whole thing could fall through and shareholders are left with virtually nothing.
    09-24-13 06:43 PM
  21. the_sleuth's Avatar
    I think Friday's preannouncement earnings numbers and final numbers will be the same range. Or else, you're opening the firm to SEC investigation and lawsuits. BlackBerry management had 20 days to prepare the estimates for last Friday's earnings warning. The number everyone is waiting for in the active subscribers on BIS/BES. How far of a drop from 72 million is the interesting question?!

    So utterly simple, you will appreciate it's brilliance.

    The stock is trading at $8.53 AFTER a $9 offer. You know why? Because everyone who IS NOT a member of Crackberry knows that the stock is heading down. After Friday, when we find out how much cash they really have, along side their obligations, $8.53 will seem like a lot.
    09-24-13 06:50 PM
  22. FSeverino's Avatar
    It's all about ROI on this deal. I have read that Ontario Teacher's Pension Plan is interested. It has over $127 Billion assets under administration. There might be other pension plans interested in the debt.

    Regardless, Fairfax efforts would be futile without a strategic partner in the smartphone industry or tech firm with deep pockets as $2.6 Billion can burn quickly in layoff expenses and R&D to develop new products / services. In my opinion, there will be more layoffs to shrink BlackBerry to profitability to make the ROI numbers work on the deal.
    i was wondering why the OTPP hasnt said anything... they did very well with MLSE. and as a teacher, i wouldnt mind seeing what they can do with this.
    09-24-13 07:30 PM

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