In a strange move, given the history between Dan Loeb and Prem Watsa, the activist fund manager’s Third Point disclosed this week that it had taken a 1.9% position in the ailing Waterloo,ON-based BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). Prem Watsa, Is of course, the CEO of Fairfax Financial Holdings Ltd (TSE:FFH), which is the largest shareholder of BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) and holds 10.5% of outstanding shares in BlackBerry.
The famous fight
Watsa famously sued Loeb and Third Point along with Adam Sender, the founder of Exis Capital, short-seller James Chanos and billionaire hedge fund trader Steven Cohen alleging the four colluded to drive Farifax Financial‘s stock down. Watsa also claimed that Loeb, Chanos, Cohen and Sender orchestrated a near five-year campaign to spread disinformation about Fairfax’s business model to well-known financial journalists.
Third Point denied Fairfax Financial Holdings Ltd (TSE:FFH)’s accusations of wrongdoing and won a dismissal of the case against it in a New Jersey court in 2011 after five years. But the court case brought a number of strongly worded emails by Loeb to light. In an email to Sender such treats as “Prem Watsa bend over the hedge funds have something special for you,” and “die, Prem Die!” peppered the page with a certain vitriol(?).
Watsa has long been called the “Canadian Warren Buffett” owing to his small-town investment advice and grandfatherly nature. Never mind that he’s made a lot of money over his decades in the industry.
Recent BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) performance
That prowess has yet to be seen in Watsa’s bet on BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). Fairfax Financial took a $880 million stake in BlackBerry and is a long ways from recouping the purchase price as BlackBerry continued to shed market share to Apple and Android phone makers after Watsa’s investment.
BlackBerry has, however, had a great run out to 2014, with share pricesup 21%. Just last month, new chief executive John Chen said that the company would be cash flow positive by the end of the year, and that it would return to profitability in 2016.
The company expects a large tax refund in the coming quarters, and has strong demand for a number of properties in Waterloo that the company owns. Chen announced a consolidation of BlackBerry’s campus and upcoming building sale.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) and other purchases
Loew’s Third Point also wrote in its regulatory finding on Friday that it had took new stakes in the fourth quarter of last year in Dow Chemical (NYSE:DOW), where it is leading a charge to break the company into parts, and T-Mobile (NYSE:TMUS), which Loeb believes should be sold to Sprint Nextel (NYSE:S).