tripleoptician

I don't believe there has been since they delisted from the NYSE Thought so. Too bad because it’s such a nice asymmetric bet to make an outsized bet on with LEAPS

I can not find any options chain for Fairfax under TSE or OTC. Does anyone know if they is a way to access Fairfax call options here?

Can you recommend any good primers to improve understanding of the payments space? Thanks in advance

Main reason I am not adding, but not selling either Liquidity very low so hard to see their exit strategy without a takeover or having sufficient float for them to sell which isn’t happening soon

I bought more today Been a holder of this company since Voss Capital wrote it up about 2 years ago. I pared back on the holding once old management (Foley/Sammons) looked like they were going to underfund the Brink opportunity. They ducked out of a conference call having Q and A for having to deal with Wyden asking legitimate questions on their poor capital allocation decisions and not sourcing more capital to speed up the Brink transition. Savneet not only had a good conference call, his background IS SAAS and optimizing capital allocation. His mindset appears quite focused on why Saas/sticky costumer products are one of the optimal businesses to run. I think this convertible debt deal is a good move because it allows adequate capital to fund the transition to on-board big Tier 1 players onto Brink POS. There is no way to take on a huge # of franchises from a Tier 1 when your staffing for the transition is suboptimal and takes 2-3 years to process them. Once a Tier 1 has picked Brink, they won’t be changing their POS again unless it is woefully underperforming. All signs point to Brink being an above average product with Tier 1 relationships from its legacy hardware business and operating on a PC/Windows infrastructure like all the entrenched Tier 1 ‘s will be on. As a CSU long, I really appreciate someone like Savneet at the helm who has studied Leonard and appears thoughtful on capital allocation. This deal will prove fruitful in the long term.

Thanks for that perspective. It was helpful

Anyone been looking at this arbitrage opportunity. Just had Independent Board Approval for $18 CAD 100% buyout transaction in early December. Awaiting shareholder vote. Currently trades at 17.25 Buyout team = Management owns 17% Fairfax/Point North own 10.5% Fairfax warrants dilute another ~20% but exercise at $33.25 and non-voting. Largest other shareholder at 18.6% plans to vote no. https://www.just-food.com/news/biggest-agt-food-and-ingredients-investor-opposes-management-buy-out_id139748.aspx Given where this trades currently it gives a 4.3% yield if transaction goes forward. Vote should be early 2019 although date not announced. This would have a reasonable IRR if it closes within 6 months or so. https://theprovince.com/news/local-news/agt-shareholders-expected-to-vote-on-privatization-deal-next-year/wcm/705b27c3-d735-49f7-92f0-52dc2d98611a If it doesn't get approval it feels like Fairfax/Management might increase offer given where this was valued when they took initial stake on the warrants. I think I'll be buying if it dips below $16 again

They produce their own needle coke via a wholly owned facility. Thus is what makes them able to create fixed priced take or pay contracts on 2/3rd of their production. NO other GE producer has their own internal supply of needle coke. Off memory I think they become unprofitable around the $2500 price for their graphite electrode. ThIs occurred in 2016 and led to bankruptcy given the debt load. The extra 1/3rd of GE production is vunerable to external needle coke supply as it needs to bè exterbally sourced. Someone correct me if wrong as I read through the weekend but didnt take notes Sorry if I was unclear - I know about their own production of Needle Coke, but as you said it only covers 2/3 of their needs according to their recent presentation. I was just wondering whether there's a big risk and Needle Coke prices spike a lot, thus making the 1/3 unprofitably - possibly by a large margin. Seems like it would take some extreme moves, but it wouldn't be the first time a company was screwed by fixed contracts with variable costs. Well the price of needle coke has spiked dramatically but those costs of production have been passed on via increased spot prices in GE productioñ. If there is no other producer that internally sources needle coke than higher prices of needle coke from Phillips would increase the cost of production for everyone. It doesnt appear steel producers using EAF have an option to not have a GE for their production and therefore higher needle coke prices just get passed to the consumer of GE. This cost seems low to the overall cost of steel production. The known unknowns are what happens with China. All discussion from the company is ex-China as no one can estimate their production abilities or ability to compete in the high quality GE market. It also looks like China is trending toward increasing the percentage of EAF steel production vs Blast secondary to the environmental factors. Assuming this continues to occur, perhaps a significant portion of internally sourced needle coke in China needs to be kept in China for GE production. I read an article for india where their gov't was forcing GE producers to create fixed prices of GE's for the steel companies despite being externally sourced needle coke. Now that can be a recipe for disaster.

They produce their own needle coke via a wholly owned facility. Thus is what makes them able to create fixed priced take or pay contracts on 2/3rd of their production. NO other GE producer has their own internal supply of needle coke. Off memory I think they become unprofitable around the $2500 price for their graphite electrode. ThIs occurred in 2016 and led to bankruptcy given the debt load. The extra 1/3rd of GE production is vunerable to external needle coke supply as it needs to bè exterbally sourced. Someone correct me if wrong as I read through the weekend but didnt take notes

https://www.barrons.com/articles/YMtOBspdDX See more on a bit of the short thesis. My instincts are similar to yours Cigarbutt A request to the State for significant premium raises isn't defacto implying that the business is underpricing dramatically and therefore having large underwriting losses. I suppose the short thesis is presuming without excessively low premiums to start they would not be able to attract new pet policies. This whole situation feels a bit like the Ebix shorting process, but that had solid cash flow that was continuing to be used to by a business. I still dont get the capital raise to buy their building. I dont see how that competes with reinvesting at 30-40% IRR's. Some twitter short comments were talking about this was needed to shore up statutory capital which Trup badly needs. My weekend work has put this in the too hard pile i think!

Read about 8 hours of conference calls/presentations/shareholder letters and a bit about the short thesis so far this weekend to try to understand the qualitative aspect of this business. Have yet to look at the quantative/annual reports yet. The long argument appears apparent/easy to understand and noted above in the write ups above with large TAM, potentially inproved competitive position secondary to alignment with vets and superior payments processing etc The short argument I want to pay attention to is the qualitative argument vs just that it trades at a crazy book value multiple for an insurance company. The best stated short argument I see is that the actual pricing model for their upfront monthly costs are at an unprofitable level. Then over the life of the ~6.5 yr avg term, Trup will need to increase insurance premium cost based on supposed cost inflation of that subgroup. The argument is that it isnt cost inflation that drives the increased premiums, it was just horrible initial underwriting. The continued revenue growth from adding new pets masks the fact that the actual underwriting is of poor quality. The shorts would say that the 70% passed onto the consumer is not sustainable and it is essentially a ponzi scheme where if growth stopped revenue would fall and the supposed adjusted margin driving the growth would collapse. The evidence for this appears to be request filings to the state to increase premiums as much as 15-20% suddenly (I have not read/seen these filings) My instincts would say that Trup has been around long enough to have a reasonable actuarial representation of what the cost plus model should be. DR states "inflation" cost in health related expenses might be 6-8%/yr based on utilizing higher cost stuff like CT instead of xray etc. But how would they be so off to need 15-20% jumps suddenly? The next part of the short argument would be that churn will happen in the mid to late cycle of the pet life when Trup tries to increase premiums significantly once health costs are going up. The increased churn of these mid to late cycle contracts ( yr 3-6) would be masked by the last few quarters of onboarding new pets early. This would allow the churn rate to seem stable at 1.6% for last several quarters. Do any longs have a counter-argument to this? I genuinely want to like this company but want to protect downside first and foremost. Thanks in advance!

Wyden has been going fairly heavily into PAR (over 10% ownership now) and maybe is selling this for more upside? What % stake did he have in IDW?

"Share repurchases: During the quarter ended March 31, 2018, we repurchased a total of 4,197,304 shares of our common stock for approximately $298 million at an average price of $71.09 per share. We have also repurchased 4,350,135 shares of our common stock for $276 million at an average price of $63.44 per share from April 1, 2018 through May 2, 2018. As of May 2, 2018, we have a total of approximately $545 million in outstanding Board repurchase authorizations remaining under our stock repurchase program. These share repurchase authorizations have no expiration dates." Thats a pretty solid buyback in 4 months. Did I read correctly that this buyback is before cash from the DMG sale? Looks like they may run out of room on available $545 million room left for the year. I think we do fine here with this level of cannibalization Edit: sleepydragon u beat me to it!

Good questions Liberty and I agree this format is more useful than with the analysts. Every time I read his annual letters I feel like I havent allocated enough with only a 7% holding!

Here is a link for those that dont know about the canadian insider website that tracks filings https://m.canadianinsider.com/node/7?ticker=FFH