Dan Loeb builds 1.9% BlackBerry stake
Key Speakers At The SALT Conference...Daniel Loeb, founder and chief executive officer of Third Point LLC, speaks during the SkyBridge Alternatives (SALT) conference in Las Vegas, Nevada, U.S., on Wednesday, May 9, 2012. Yahoo! Inc. investor Third Point LLC escalated pressure for management change at the Web portal, urging directors to immediately replace Chief Executive Officer Scott Thompson over his misrepresented academic credentials.©Bloomberg
Dan Loeb
The activist hedge fund manager Dan Loeb has taken a stake in BlackBerry, the ailing smartphone maker, in a move that pitches him back into the orbit of Prem Watsa, the Canadian investment guru who sued him eight years ago.
Mr Watsa’s Fairfax Financial is BlackBerry’s largest shareholder, and led a refinancing of the company last year, after failing to find backers for an outright takeover bid.
A regulatory filing on Friday night revealed that Mr Loeb’s Third Point has taken a 1.9 per cent stake in BlackBerry, putting him among the company’s top 10 shareholders. Fairfax has 10.5 per cent.
The stake, worth $92.5m, is small relative to many of Third Point’s other positions, which include holdings in Dow Chemical, Sotheby’s and Sony, where Mr Loeb has been agitating for strategic changes.
The fund also typically discloses activist positions in correspondence with its investors or in public letters to company management, suggesting Mr Loeb may not immediately be aiming to put pressure on BlackBerry.
However, the disclosure of the stake has piquancy because of the history between Third Point and Fairfax and between the two men in particular.
When several hedge funds took short positions in Fairfax stock in the middle of the last decade, Mr Watsa alleged dirty tricks and sued Third Point, SAC Capital and Jim Chanos’s Kynikos Associates.
The legal battle unearthed strongly worded emails sent by Mr Loeb at the time of the bet against Fairfax.
Third Point denied Fairfax’s accusations of wrongdoing and won a dismissal of the case against it in a New Jersey court in 2011.
The investment in BlackBerry has been a rare black eye for Mr Watsa, who is known as “the Canadian Warren Buffett” for his humble manner and for dispensing homespun investment wisdom.
He invested $880m in the company expecting sales and profits to rebound, whereas it has instead continued to lose market share to Apple and Android phones.
Last month, the company’s new chief executive John Chen said BlackBerry would be cash flow positive by the end of this year and profitable by mid-2016. The stock is up 21 per cent since the start of January.
Third Point also confirmed on Friday that it took new stakes in the fourth quarter of last year in Dow Chemical, where it wants a break-up of the company, and T-Mobile, which it wants sold to Sprint Nextel.