BlackBerry (BB.TO)

(A Top Pick Nov 26/12. Down 43.45%.) Had never owned this in the fund, but does own some personally. This one looked good a year ago. If it were trading above $10.34, which was his last line, it would be “coming out of the blue” again, a positive position in his funds.

Bought before takeover was announced. The deal did not make sense to him.

A great company. Struggled to transition to a software and service world. They are going to use up their cash. It is not obvious who should buy them. There is some value buyer. Their messaging platform is wonderful. Thinks he will be pressured to move to other vendors because of the concerns.

If the Chinese Lenovo are the last chance, then the Canadian Gov’t may allow the sale. One of Blackberry’s biggest customers is the US government, so it is unlikely to be sold to China.

Does not rank well in his process, about third or forth from the bottom. They need to do a lot before they could come back into his process. If a deal gets done it could be at a lower price. Thinks somebody will buy it as a whole for the technology.

With Mike Lazaridis there and Prem Watsa looking at it, every major institutional client in Canada is going to get a call on this as a potential capital investor. There is some value here but it is a bit of a melting ice cube.

At this point, Blackberry the consumer products company, is basically dead. The question is, what are the patents worth and he has no idea.

Has been a tough story. It goes to show that when there is a technology shift how valuations can shift very, very quickly. How sincere is Prem Watsa on his takeout? He has no reasons to doubt that he will not go through with this offer. If you own, he would Hold and get taken out at $9. If the stock trades up to $9, take your money at that time.

Does not take positions when it is a financial buyer rather than a strategic buyer. Probability of deals closing is much lower than with strategic buyers. Would reconsider buying if a strategic buyer came along.

(A Top Pick September 7/12. Up 20.09%.) Has a possibility for value if it becomes a utility. Margins on platform businesses are astonishing such as 60%-70%. He’d be surprised if another bidder didn’t come. If you own, continue to hold.

Initial reaction to today’s news is not all that much of a surprise. Fairfax has made a bid for the company. He says if they had declared a $1 dividend at $100 share price they would have protected their share price to some extent. It could get taken private from here. There is a market for the device and he thinks they have made some great strides.

There has been a letter of intent from Fairfax Financial (FFH-T) to acquire this company. It is a nonbinding kind of a deal. He wonders if there is a strategy here to try to pull some interests from other sources, but he feels they are willing to go through with the whole transaction. Not sure what it will mean for the company itself. The price they have offered is probably good for the buyer, and perhaps any bid is better than no bid.

Its value is sort of on a breakup basis and something in the area of $14. This would be a speculative buy.

It is not going to do any worse. A fundamentally challenged company but there is a lot of value in the patents, software, and subscriber base, and they are looking at strategic alternatives and might sell the company. There is too much event risk to short it.

They are laying people off and there is contraction there. With all the rumours that are going on, he doesn’t know of any reason why a buyer should rush in to this. If he owned the stock, he would take his lumps and move on.