Fairfax Financial sells out of BlackBerry at a steep loss, 16 years after buying in

Fairfax Financial Holdings Ltd. FFH-T has sold out of BlackBerry Ltd. BB-T, ending a once-close but ultimately money-losing 16-year relationship with the Canadian technology pioneer – just as its car software business is drawing renewed investor interest.

Toronto-based Fairfax revealed in a U.S. regulatory filing Friday that it no longer owned any shares of BlackBerry.

According to U.S. regulatory filings, Fairfax had 26.26 million shares in early May, down from 35.4 million last September. It held 46.7 million shares for about 11 years, but began selling down its holdings sometime after March 31, 2025, the filings indicate. Fairfax chief executive officer Prem Watsa declined to comment about the investment.

Fairfax was one of BlackBerry’s largest and most influential shareholders for years, with 8 per cent of the stock as of early 2025. Furthermore, Fairfax had rights under a series of convertible debenture financings dating to 2013 to turn its BlackBerry debt into more stock. Fairfax never exercised those rights – which would have increased its BlackBerry equity stake to upward of 16 per cent – instead rolling over part of the debt several times into new debentures until it was fully repaid in 2024.

Fairfax earned about US$200-million in interest income over 10-plus years holding US$500-million of BlackBerry’s debentures, Mr. Watsa said in his annual letter to his shareholders published in 2024.

However, Fairfax appears to have lost far more than that on its BlackBerry stock, for which it paid about US$882-million. Mr. Watsa said in the letter two years ago that Fairfax had bought its then-current holding of 46.7 million shares for an average US$17.16 apiece. Other than a few days in 2021 when “meme stock” speculators drove up the share price, BlackBerry stock has not traded anywhere close to Fairfax’s average cost since early 2012.

Based on when Fairfax sold down its BlackBerry stock, it would have booked a loss of at least US$288.5-million. That’s a best-case calculation based on the stock’s peak prices during the periods in which it sold its BlackBerry stock. Fairfax likely fetched less than that, meaning its losses would have been much higher. That adds to US$36-million lost when Fairfax sold 5.2 million shares in 2014 for about US$7 apiece less than it paid, for a total loss in excess of US$124.5-million on its BlackBerry stockholdings.

Mr. Watsa called his BlackBerry foray “another horrendous investment by your chairman,” in his letter to shareholders two years ago. “To make matters worse, imagine if we had invested it in the FAANG stocks” he added, referring to Facebook parent Meta Platforms Inc. META-Q, Amazon.com Inc. AMZN-Q, Apple Inc. AAPL-Q, Netflix Inc. NFLX-Q and Alphabet Inc. GOOGL-Q, the parent of Google. “The opportunity cost to you our shareholder was huge! Please don’t do the calculation! No technology investment from me!”

The opportunity cost was substantial. Had Fairfax put that US$882-million into any of the FAANG stocks instead, the investment would have grown at least eightfold in value and as much as 27-fold over the 11 years from Jan. 1, 2013, to Dec. 31, 2023, shortly before Mr. Watsa wrote that letter. All five stocks have gained further since then.

BlackBerry represents a small holding for Fairfax, which had total assets of US$109.1-billion on June 30. Fairfax stock has also had a solid run, gaining 311 per cent over the past five years.

More to come.

With files from Andrew Willis and James Bradshaw