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Christopher Wallace

 
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  • The Worst Investment In The World [View article]
    VIX is presently in backwardation, as it was leading up to the last debt ceiling crisis, the implications of which are discussed here: http://seekingalpha.co...
    Oct 8, 2013. 09:14 PM | 1 Like Like |Link to Comment
  • The Worst Investment In The World [View article]
    Actually VXX is just a terrible buy-and-hold long term investment. Which everyone knows. It can, and has, been a very good hedging and short term investment tool. The knock on VXX is the same knock as exists on any future that typically trades in contango. VXX tends to have even more contango than most. But there are certain periods, admittedly rare, when that contango turns to backwardation and the negative roll yield turns positive. You may want to check out the current term structure.
    Oct 8, 2013. 04:54 PM | 4 Likes Like |Link to Comment
  • As BlackBerry Shares Swoon, A Different Kind Of Buyer Emerges [View article]
    The prospect of Fairfax obtaining $3B of debt for the BBRY blackout is impossible. Bankers hate 2 things: negative cash flow and uncertainty. BBRY is fraught with both. Fairfax' only chance of completing this deal is by putting together a consortium of other financial buyers an in all (or nearly all) equity transaction. That outcome appears highly improbable. A strategic investor (you have named them all) would certainly not join the Fairfax bid but make their own offer below $9 knowing that certainty of close will trump price. Fairfax has become irrelevant to the BBRY bid process, which the market is shouting by the now 17% arb from market price to bid price.
    Oct 4, 2013. 11:49 AM | 3 Likes Like |Link to Comment
  • Strange Market Correlations And The Only Fed Indicator You'll Ever Need [View article]
    Interesting article. I too looked at some of these indicators (breadth and money supply) and wrote about it http://seekingalpha.co... I h learned that my bullish article attract a lot of positive comments; my bearish ones, not so much! In any event, that article shows how the A-D line is not keeping up with the market, previously a harbinger of darker days.
    Oct 3, 2013. 10:49 AM | 1 Like Like |Link to Comment
  • BlackBerry: Why No One Is Going To Top The Fairfax Bid [View article]
    If PW gets his funding, that changes everything. My article, and my resulting criticism of the Board are based upon accepting a $9 bid from an un-funded bidder. If PW brings the requisite funding to the table, that is a different thing. Price would then have to be the differentiator between bids. Right now price is not the issue; ability to close is. Prem can submit all the definitive documents he wants, but it is only paper until another $4.2 billion signs along with him.

    And you are correct about the break fee which will increase the cost to BBRY of accepting another bid. Which, again to re-iterate, is my criticism of the Board for agreeing to pay a break-fee on an unfunded deal. It is unheard of in my experience and is the most egregious freebee a former director could possibly receive.

    We wait and watch for further developments. Rumors are that Cerberus is circling; not exactly guys to create a bidding war, but good to have at least another set of eyes looking under the covers.

    I am glad you put your hedge in place. In the circumstances, I think that was wise. Good luck to you and all BBRY shareholders, you guys certainly deserve better.
    Oct 2, 2013. 07:44 PM | Likes Like |Link to Comment
  • A Look Into The Anatomy Of BlackBerry's $1 Billion Loss: More Like An Autopsy Than A Diagnosis [View article]
    Thanks Michael. Add the cash to your numbers and you have Prem's bid, plus or minus a few hundred million. Still, I like the short side of this trade better. Cerberus is the subject of the new rumors. Thy are not exactly known for bidding wars. A take under from them, fully financed, would seem to make more sense.
    Oct 2, 2013. 02:00 PM | 2 Likes Like |Link to Comment
  • A Look Into The Anatomy Of BlackBerry's $1 Billion Loss: More Like An Autopsy Than A Diagnosis [View article]
    The writing on the wall spells out that the handset business is rapidly becoming as dead as their playbook business. What is the value of the other patents and the enterprise software without new handsets? I am not being rhetorical, I am genuinely asking. Presumably a diminished value, but my question is how much? Anyone with an answer/guess?
    Oct 2, 2013. 01:08 PM | Likes Like |Link to Comment
  • A Look Into The Anatomy Of BlackBerry's $1 Billion Loss: More Like An Autopsy Than A Diagnosis [View article]
    Great title for your article!
    Oct 2, 2013. 10:51 AM | Likes Like |Link to Comment
  • BlackBerry: Why No One Is Going To Top The Fairfax Bid [View article]
    Slick - thanks for your comment. The reason WHY no one will pay higher than $9 is that no one needs to. The BOD has said to the world, $9 is an acceptable price. They have accepted that number from a 10% holder who does not have the financing lined up for the deal. If MSFT, ORCL, GOOG, IBM as you have mentioned, or someone else comes along, with a fully funded deal, why would they offer more than $9? The Board would boot Prem's un-financed, subject deal in a heartbeat to accept a firm one at the same price. Which was the gist of the article.
    Sep 30, 2013. 02:17 PM | 1 Like Like |Link to Comment
  • BlackBerry: Why No One Is Going To Top The Fairfax Bid [View article]
    Wiesje - I think that is a very well thought out comment and properly expresses the outrage that BBRY shareholders are entitled to feel as their investment diminishes. Matters are made so much worse by the fact that Fairfax has an enormous information advantage and would have answers to the key questions on unsold inventory and the prospects for it being sold at a discount, which will be critical in determining if one should tender to a $9 bid. To squeeze out the public shareholders at this critical juncture, and give them inadequate information and then no chance to potentially ride the potential upside from this low point is, as you have pointed out, wrong ethically and should be wrong legally, IMHO. While I appreciate the benefit for the Company of getting out of the public spotlight, that benefit is equally offset by the harm it does to its shareholders.
    Sep 30, 2013. 11:02 AM | 2 Likes Like |Link to Comment
  • Memorandum To The BlackBerry Board Of Directors: Stop The Charade And Manage The Company [View article]
    Yes, we are left guessing, with no conf call after the earnings report, while Fairfax combs through a data room full of this sort of information, or just walks down the hall and asks the CFO or TH. And shareholders are expected to tender their stock to his bid with that kind of information advantage? Shameful, it should not be legal.
    Sep 30, 2013. 10:25 AM | 1 Like Like |Link to Comment
  • BlackBerry: Why No One Is Going To Top The Fairfax Bid [View article]
    Watsa has claimed that he will use debt in the transaction; he has also claimed he will find equity partners. Neither has become the case so far. The best number I have seen for debt in this would be $2B which would be secured by the patents and would have a junk rating. I personally think that is pie in the sky; BBRY is not bankable in its current state, IMHO. Once the inventory problem is sorted, if that ever happens, and they log a few quarters with 40% less head count, those results might allow some debt to come on then, but I have serious skepticism about any debt coming forward now.
    Sep 29, 2013. 12:04 PM | 2 Likes Like |Link to Comment
  • The Impossible Situation For North American Palladium [View article]
    Thanks for your comment, hards121. I agree, the collaborative process here has been excellent. The commenters really helped me to fully and properly understand the change in sustaining capex going forward. I remain surprised, however, at how little the company has done to inform investors clearly and accurately on the issue.
    Sep 28, 2013. 01:36 PM | Likes Like |Link to Comment
  • Shareholder Inequality: Fairfax's Other Motivations In Its Bid For BlackBerry [View article]
    True that!
    Sep 28, 2013. 12:54 AM | Likes Like |Link to Comment
  • Shareholder Inequality: Fairfax's Other Motivations In Its Bid For BlackBerry [View article]
    savinceb: I had read $17, but your concept is correct.
    Sep 28, 2013. 12:54 AM | Likes Like |Link to Comment
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