I guess it's stopped now .
Fairfax sure got money by taking this public.
I was wrong about it going to zero. Not by much.
Derek Decloet, Bloomberg News
Canadian financial group Fairfax Financial Holdings Ltd. offered to buy out minority shareholders of agriculture technology firm Farmers Edge Inc. at a price that would crystallize near-total losses for any longer-term holders of the stock.
Fairfax’s takeover bid of 25 cents a share is almost 99 per cent below the $17 a share at which Farmers Edge offered stock in a March 2021 initial public offering.
Farmers Edge uses technology to analyze weather, soil moisture, satellite data and other information to help farmers plan crops. The IPO happened in an environment when ultra-low interest rates had opened public markets to speculative ventures; the Winnipeg, Manitoba-based company briefly enjoyed a stock market value of about $835 million.
But its growth plans never came to fruition and, in fact, the business has been shrinking, reporting just $4.4 million in revenue in the third quarter. It has been consistently burning cash.
Fairfax, a Toronto-based investment and insurance company, already owns 61.4 per cent of Farmers Edge. Fairfax has been helping to keep the company afloat by extending a credit line.
Takeover discussions are at a preliminary stage and no decision has been made on a potential transaction, Farmers Edge said in a statement Thursday night. The thinly traded shares closed Thursday at 10 cents.
It’s the second time this week a Canadian technology company that went public in 2021 attracted a takeover bid far below its IPO price. Q4 Inc. agreed to a $6.05-per-share cash takeover from Sumeru Equity Partners. It went public at $12.