With Prem Watsa resigning from the Board of Fairfax Financial this weekend it looks like our call on Blackberry last week was particularly prescient (see here –http://www.spreadbetmagazine.com/blog/a-reminder-of-our-blog-earlier-this-week-as-bbry-trades-up-1.html). The stock is one of the largest stock plays in our Global Macro fund and we expect that in the event of an outright sale that a price closer to $15 than $10 will be achieved.
Book value still comes in around $12 and although a management involved purchase obviously creates the conflict of them looking to buy it on the cheap, particularly if Watsa is involved, we doubt that an independent non exec board would allow a fire sale with the $3bn cash backing. At the very least, this process will now flush out other interested parties.
Any weakness towards the $10 level and we will look to add to our position.
R Jennings, CFA. Titan Investment Partners.
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