Fairfax to purchase additional convertible debentures of BlackBerry

By Bla1ze on 8 Jan 2014 01:51 pm EST
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Back in December BlackBerry announced they would be extending the purchase option deadline for additional convertible debentures. Today, the company has announced that Fairfax Financial Holdings Limited has agreed to purchase an additional $250,000,000 principal amount of 6% unsecured subordinated convertible debenture through its subsidiaries. The transaction will be completed on or before January 16, 2014.

Press Release

Fairfax to Purchase Additional Convertible Debentures​

WATERLOO, ONTARIO--(Marketwired - Jan. 8, 2014) - BlackBerry(R) Limited (NASDAQ:BBRY)(TSX:BB), a world leader in mobile communications, announced today that Fairfax Financial Holdings Limited has agreed to purchase, through its subsidiaries, an additional $250,000,000 principal amount of 6% unsecured subordinated convertible debentures of BlackBerry (the "Debentures"). The additional Debentures will be purchased pursuant to the exercise of a previously-announced option that was granted in connection with BlackBerry's private placement of $1 billion principal amount of Debentures on November 13, 2013, and the transaction will be completed on or before January 16, 2014.

63 comments

Kingdmen

Watsa sure has confidence in BlackBerry man, the dude has balls. I'm praying he knows something we don't.

Posted via CB10

m1kr0

Or brass cahunas.

Posted via CB10

sk8er_tor

Well he does have insider knowledge so he's not acting blindly.

qwerty4ever

And this insider knowledge will come back to haunt BlackBerry. Prem is like the schoolyard bully; tossing around his muscle against the smaller children. He is positioning himself to be the largest creditor to ensure a big payday when BlackBerry declares bankruptcy or when BlackBerry starts bringing in huge profits.

Posted via CB10

Prem WatsApp

Tick the boxes:

Cash ready
OS ready (almost there...)
Great team ready
New devices?

Marketing?
10 9 8 7 .... Go the Berries!

My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...

johnnyuk

I don't really care what Prem knows of if he is investing wisely or not as long as he keeps pumping money in to BlackBerry!

Posted via CB10 on Z30 STA100-2 on O2 UK - Activated on BES10.2

inurear

http://www.gurufocus.com/StockBuy.php?GuruName=Prem+Watsa

Just take a look at his trading history, he knows something about investing wisely.

inurear

Seeing that his wealth has grew significantly even through the recession. I would lean on the "he knows something" side of things.

Dave79

Not surprised - what great deal they put together.

theRock1975

Does anyone know why a company with $3B in cash needs to pay interest on an additional $0.25B???

Something I can't piece together. Seems like Watsa and pension funds doing themselves a favor and board is allowing them to do it.

Are they about to make an acquisition?

Posted via CB10

Jtaylor1986

3 billion cash is not a particularly large amount for a company of that size in that industry.

Dave79

Well they drove the price of the stock at rock bottom and basically bought the company for 1 billion, adding 250mil serve the only purpose of making lots $$$.

bobshine

They don't have a choice to issue those debts. Back in November, they offered an option to do so... So Blackberry has the obligation to offer the debts. And of course they will buy them now, the stock is around 9$, the debentures are convertible at 10$.

Posted via the Android CrackBerry App!

mscloutier

Yes!!!

Posted via CB10

BBPandy

That's a good sign that they have faith in BlackBerry :)

Posted via CB10

highoctane74

Seen that coming. Very good!

Posted via CB10

BerryRipe

I'm not certain exactly what that means but it's sounds like a huge investment! It's getting HOT up in the BlackBerry world!

All systems are a go!

Keep The Faith  BlackBerry Q10 

Jtaylor1986

Basically means BlackBerry wanted the money and Fairfax thought it would be a profitable loan.

VR6

So the juice is running on $1.25B now?

BlackberryHeating

I hope some big announcements follow this regarding BlackBerry and what they have planned!

Posted via CB10

johnnywadiii

Maybe 10.2.1?

Posted via CB10

kronykapitalist

He puts his $ where his mouth is!

RubberChicken76

I don't know ... he's buying debt (with an interest rate) not stock. They have to pay him back $250 million + interest, vs. him taking a chance and buying $250 million worth of stock that might go up for down. Risky if BlackBerry goes under or defaults but less risky than a fluctuating stock.

Jay Hooker

6%... and if they default they break the company up and sell the pieces and you get paid before anyone else... i would like a piece of that too.

Posted via CB10

Kingdmen

True. It's win win I guess. Mitigates any potential loss in his stocks as he's going to get the 6% succeed or fail

Posted via CB10

Jim Wolfson

That's what GM bondholders (like some in my family) thought before Barack Odummy came along and abrogated, ignored and then defiled the USA bankruptcy laws that clearly say what you pointed out.

Didn't happen. Bondholders got screwed by the US government because of Obama. Yes, I'm aware this is Canada, and you're not stuck with an arrogant tyrant like Obama, but it's an example of unbridled hubris and can happen anywhere.

Jtaylor1986

It's unsecured debt so it's not guaranteed to be repaid.

nt300

This is why I like him, he has balls of iron and sees something extremely positive about BlackBerry.

BBstarBB

Awesome! Go BlackBerry go.

swcomputerdesign

This announcement and the stock is up at 8.51 and climbing. Go BlackBerry.

Posted via CB10

Nile Porter

That stock could plummet at any moment. It's very sensitive at the moment.

Posted via CB10

krackerjack69

Prem has already made a cool few million from the share purchase only a couple of weeks ago !! Not through fairfax but some other private company. Rich get richer and I keep wishing I had pocket change like them lol

fast666

Looks good.

ChannelX C000D3759 We promote channels

canuckbear

Wow. Serious vote of confidence. Wish I picked up shares on lows.

Posted via CB10

VR6

WOW Wasta has some deep pockets

jojo beaconsfield

Bought himself a million dollars worth of stock as a Christmas present to himself I wonder if he gets the Bentley from last years CES?

vanrickman

Good way to start the year off.

Sent from the phone of the gods.....Z30

SuperionMaximus

Well, Fairfax seems to be in it for the long haul. Not likely going to be able to flip that investment in the next year anyway. Hope the long term goal isn't to make the company profitable again only to put it back up for sale when it has a higher perceived value

Xandrex_BSCF

If you look at Fairfax history, they have not done that in the past decades (sell when profitable).
I'm not in Prem's mind but I don't think his main motivation was money when he created the fund. And I believe it still is not today.

Remember that Fairfax stands for "fair financial acquisition".

Besides Fairfax is not the owner of BlackBerry. They have a weight in decision making but no ownership from a legal point of view, so selling is not done like that.

Posted via CB10

RP Singh

¡No hablo chino!

Sent from my iPuh-lease-as-IF

NamelessStar

Mo money mo money mo money, watsa is putting a lot into BlackBerry.

Posted via CB10 on my blazing fast Z30

smarcuzzi

BlackBerry is now starting to stir the pot.

I really hope this is all leading to major success. I love the brand.

BlackBerry Q10 and Z30 current

Posted via CB10

nhanken

That's a lot of ZEROs - my head hurts lol

Posted via CB10

rcab

If the stock goes past $10 a share he can convert and then would have instant profits beyond the 6%. I think this is a hugh step of confidence that he believes the stock will rise so that he can then convert at the $10 per share price. I think he believes the stock will go up by a large amount and this locks in his ability to convert and make more. If the stock doesn't go up by a large amount he still has the 6% to fall back on plus his original investment. It is like going to Vegas and watching the high rollers place their bets and you duplicate their action. May be time to buy more stock

timmy t

Does this have to do with some $10 share price threshold that might be reached soon?

Jtaylor1986

No. It was a secondary issuance part of the original deal.

JakieWolf

Good news, clearly something good is being done at BBRY!

BlackBerry Z30 STA-100-2 running 10.2.1.1055 :D

rotorwrench

I bought in at $6.20 so this helps to keep my wife off my back about it. lol

theRock1975

Good man. Don't let waste money on more shoes and face creams and magazines. BlackBerry stock is better.

Posted via CB10

Jim Wolfson

Please tell us your stop order has now been raised above breakeven. You DO have a stop order, don't you?

rotorwrench

Yep, actually a trailing-stop.

hassan boutabssil

Long life to BB

Posted via CB10

hassan boutabssil

I have Q10 I ordered Z30

Posted via CB10

sianto

Totally saw this coming, I said it before the conference call!

christoph77

Well done!! :)

C0038297E Quote of the Day (BBM Channel)

oilgeo10

The future joke may become: What does Forest Gump say about Prem Watsa? Ans: "Stupid is as Stupid does!"

jojo beaconsfield

Yeah ,forest also likes chocolate because ..you never know what you get when you take one out of the box..

YTDW2000

With each passing day the storm clouds keep breaking up.

This community and those who believe in BlackBerry have finally had enough of the lynch mob mentality and are starting to fight back hard.

Sent from my BlackBerry Z30

vic48

I now have my z30 and z10 z30 is amazing glad I got it And the best of BlackBerry

Posted via CB10