Prem Watsa.This week, it was widely reported that BlackBerry co-founder Mike Lazaridis took the historic step of selling sold 3.5 million shares of the company for proceeds of approximately $27.4 million, leaving him with just a 4.99 percent stake in the Waterloo-based device maker, down from 5.7%.
It was historic because Lazaridis’s actions left him just below the 5% mark, making him exempt from the SEC’s 13D regulations that require insiders who own more than that to report all trades.
For Lazaridis’s involvement with the company he founded, the writing seemed on the wall when John Chen took over the reigns in November from Thorsten Heins. Surprisingly, Lazaridis admitted he had never met Chen.
While Lazaridis may be exiting stage left after nearly thirty years, BlackBerry’s largest shareholder is continuing to add to his position.
On December 24th, Prem Watsa at (U.S.) increased his stake in BlackBerry, buying 129,000 shares of the company in the open market at (U.S) $7.71. The stock cost him $994,590.
The Christmas Eve purchase was a bit unusual as Watsa normally makes purchases through his Fairfax Financial, which owns 51.85-million shares of BlackBerry (as of September 30th). Fairfax’s investment is nearly double that of the next largest shareholder, Primecap Management, which owns just over 28-million shares.
Fairfax Financial, an insurance company with direct investments in other insurance companies and a portfolio of bonds and common stocks, has an average annual return of 17.9% over the past decade. By comparison, the S&P 500 has returned 1.4% per year over the same period. Fairfax was Canada’s most profitable corporation in 2008, and through moves that sometimes puzzled the general public, Watsa kept making money through the worst recession in a generation. Before the market collapse of 2008, Watsa used credit default swaps to bet against the US credit market. His $341 million bet returned more than $2 billion. Last year, Fairfax Financial’s revenue passed $8 billion for the first time ever.
Shares of BlackBerry on the Nasdaq closed Friday up 3.4% to $7.30.