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  "documentTitle": "Fairfax Financial Holdings Ltd. (FFH)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Muddy Waters Research",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-02-08 00:00:00",
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  "notes": "The slide highlights the aggressive accounting treatment of a call option and the circular nature of the cash flow (investment followed by dividend).",
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      "text": "We believe that, in substance, this is a financing transaction.",
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      "text": "MUDDY WATERS RESEARCH",
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      "text": "Fairfax was able to book a gain to book value of $429 million by issuing stock equivalent to 9.99% of Odyssey to CPPIB and OMERS for $900 million. As part of the transaction, Fairfax included an option to purchase the interests of CPPIB and OMERS. We believe that, in substance, this is a financing transaction. While the value of the option premium isn't separately broken out, we believe the fair value of the call option is, in substance, cash that ultimately will be repaid to OMERS and CPPIB when the option is exercised.\nBooking a fair value gain immediately upon the transaction is more aggressive than in previous transactions with OMERS, which generally resulted in gains subsequently.",
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      "text": "book value: $429 million",
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      "text": "On December 15, 2021 Odyssey Group issued shares representing an aggregate 9.99% equity interest to a subsidiary of Canada Pension Plan Investment Board (\"CPPIB\") and OMERS, the pension plan for Ontario's municipal employees, for cash consideration of $900.0 which was subsequently paid by Odyssey Group as a dividend to Fairfax. The company recorded an aggregate equity gain of $429.1, principally comprised of a dilution gain and the fair value of a call option received, which was presented as net changes in capitalization in the consolidated statement of changes in equity. The company has the option to purchase the interests of CPPIB and OMERS in Odyssey Group at certain dates commencing in January 2025.",
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      "kind": "title",
      "text": "Boosting Book Value by $429 Million Two Weeks Before 2021 Year End by \"Selling\" 9.99% of Odyssey to OMERS and CPPIB",
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