Outsider shareholders take control of Global Railway again

For a company that has become very tiny, Global Railway Industries has certainly attracted considerable attention from shareholders. For the second time in less than four years, a group of outsider shareholders has taken charge of the company, which held its annual meeting in Calgary Thursday. And in both cases the outsiders have launched strategic reviews.

In the meantime, long-standing shareholders wonder if and when they will receive either capital gains or distributions and also wonder about the implications of moving the corporation to British Columbia from Alberta.

Here are the highlights of the two forays:

In April 2009, after mailing the circular, the company received notice from “shareholders holding a significant number of shares” wanting to reduce the number of directors (to six) and nominate four of its own. At the time, the shares were 81¢ and Hesperian Capital Management and Mawer Investment Management each owned more than 10%.

At the May 12, 2009 annual meeting, four new directors — Jacques Cote, Laurie Bennett, Alan Sellery and Thomas Dea were elected, though their level of support (about 80%) was below what the two incumbents received. The new board then set about “exploring all available strategic options to maximize shareholder value.”

In the spring of 2010, the company, which was trading at $4.50 in mid-2008, didn’t have any major shareholder, though Dea, the lead director, is listed as owning 1.305 million shares. The company had five directors who were busy selling assets and renegotiating credit facilities.

But at the 2011 annual meeting there were four directors, Dea still owned 1.305 million shares and the strategic review was still underway. In July it sold its operating subsidiary (CADRI) for $12.9-million. A company controlled by chief executive Fausto Levy, was the buyer.

“The sale of CADRI represents the culmination of the strategic review process commenced… in 2009, “ said a release. The sale and the wind-up strategy was narrowly approved by shareholders (two-thirds support was required.) Since then, shareholders have received $1.40 in distributions. They were slated to receive an extra 23¢.

At the 2012 meeting, Dea, the chairman, is listed as the beneficial owner of 2.135 million shares with “two individuals who may be considered joint actors with Dea” owning an additional 1.789 million shares.

Last November, Dea and the two “joint actors” sold all their shares (a 25.7% stake) to an affiliate of Mercury Partners & Company for 23¢ a share. (North Group Finance is the affiliate.) For Dea, the sale meant a return of $1.63 on an original 81¢ investment.

The deal, which lead to a change of control, was done “in accordance with exemptions from the take-over bid and prospectus requirements of applicable Canadian securities laws.” The reason: the buyer spent more than $150,000 to acquire the shares. Soon after the former directors resigned and replaced by four others, including Tom Kusumoto, the new chief executive.

After taking over, a plan to revive the company and “to use its remaining assets to carry on business to enhance shareholder value” was put to shareholders. Again, two-thirds support was required.

Adding intrigue to Thursday’s meeting was that on Wednesday, North Group acquired a further 1.457 million shares — or 9.5% of the float. North paid 22¢ for the block. It’s not immediately clear the effect of that purchase as only registered shareholders as at Dec. 28 2012 were entitled to vote.

North Group acquired the shares for “investment purposes.” The shares closed Thursday at 20.5¢.

Chinese hacking of US media becoming a “widespread phenomenon”

Computer systems operated by The Wall Street Journal have been penetrated by Chinese hackers for the apparent purpose of monitoring the publication’s coverage of China, the newspaper reported Thursday.

The acknowledgement came in a short article published less than 24 hours after The New York Times reported a similar breach. According to the earlier report, the NYT network had been rooted for four months by hackers who were intent on gathering intelligence about a series of stories related to the family of China’s prime minister. The report cited unnamed sources as saying Bloomberg News was also targeted by Chinese hackers after the news organization published an article in June about the wealth accumulated by relatives of Xi Jinping. Xi has since become China’s general secretary of the Communist Party and is expected to become president in March.

The NYT went on to say that media outlets have been targeted since 2008, and today’s WSJ article characterized the hacking campaign as extensive.

Read 2 remaining paragraphs | Comments

Former New York mayor Ed Koch moved to hospital intensive care

NEW YORK (Reuters) – Former New York City Mayor Ed Koch was moved to a hospital intensive care unit on Thursday, his spokesman said, in a sign that his health could be deteriorating.

Mockups of a 4.94-Inch ‘iPhone Plus’ Show Why a Larger iPhone Might Make Sense

Amid rumors of a significantly larger “iPhone Math”, Instapaper developer Marco Arment has spent time developing some speculation and a few mockups showing how Apple could achieve an iPhone with a nearly 5-inch without disrupting the existing app ecosystem.

The recently rumored, larger-screened “iPhone Math”, or more likely “iPhone Plus”, is plausible as an additional model (not a replacement) alongside the 4” iPhone. And there’s a good chance that it would have a 4.94”, 16:9 screen.

The theory is easy to understand: perform John Gruber’s Mini-predicting math backwards. The iPad Mini uses iPhone 3GS-density screens at iPad resolution. What if an iPhone Plus used Retina iPad screens with iPhone 5 resolution, keeping the rest of the design sized like an iPhone 5?

In the scenario put forth by Arment, an 1136×640 screen matching the iPhone 5’s resolution but blown up to the Retina iPad’s 264 pixels-per-inch resolution would measure 4.94 inches diagonally.

Arment notes that such an iPhone Plus maintaining the same relative proportions as the iPhone 5 but with the larger screen would measure somewhere between the Galaxy S III and the Galaxy Note II, but that Apple would likely be able to trim down the chin and forehead of the device somewhat to bring the device closer to the Galaxy S III’s overall size.

At an iPad-like pixel density of 264 ppi, Apple could have a hard time positioning the iPhone Plus as a Retina device given that a phone is assumed to be held closer to the eye than a tablet, but some consumers may still prefer the option of having a larger screen to offer more flexibility such as being able to zoom out further on text or view small text with the device held further from the eye.

Arment offers several other mockups showing what Apple’s iOS device lineup would look like with a larger iPhone in it, as well as how users could take advantage of smaller font sizes on the larger screen to show more text.

Best Buy Closing 15 Big Box Locations In Canada, To Be Replaced By Smartphone And Tablet-Focused Micro Stores


Best Buy Canada announced today that it will be closing 15 locations across the country, including seven Best Buy-branded locations, and eight stores bearing the Future Shop moniker (a Canadian electronics reseller Best Buy acquired in 2001). The store closures will result in 900 layoffs, but those employees will have first dibs on jobs at smaller outlets focused on mobile device sales the retailer plans to open in place of the closing stores.

While the closures only affect 15 of the 228 locations operated by Best Buy under the Future Shop and Best Buy brands, that still makes up around 10 percent of their total sales floor surface volume, according to the National Post. Sales for Best Buy fell 6.4 percent internationally over the course of 2012, the company reported during its most recent quarterly earnings report. Sales also dropped 8.2 percent in the quarter ending in November of last year in Canada and China, so there appears to be a continuing decline overall in those markets.

The closure and launch of smaller stores reflects a preference to target the growing mobile phone and tablet market, over legacy products like TVs and computers that carry smaller margins and have higher carrying costs. Best Buy locations have massive sales floors, but also huge warehouses and stock rooms to house the goods that populate those floors since shelves can only hold so many TVs at once. Best Buy Mobile locations, by comparison, have far smaller physical footprints and drastically reduced requirements for storing in-stock items.

The retailer has been beefing up its online store at the same time as it is trimming back brick-and-mortar, adding entirely new categories of goods to its web-based selection, including sporting goods, outdoor items and various lotions, most of which are available online only, so it’s no surprise to see them shed costly real estate.

Nintendo: No Wii U price cut in the works

Since Nintendo announced yesterday that it is cutting back Wii U sales projections, some consumers began to wonder if the system, which currently starts at $300, would see a price cut sooner rather than later. Nintendo President Satoru Iwata threw cold water on those hopes today, telling investors that such a price cut would not be forthcoming.

“With Wii U, we have taken a rather resolute stance in pricing it below its manufacturing cost, so we are not planning to perform a markdown,” Iwata said in translated remarks. “I would like to make this point absolutely clear. We are putting our lessons from Nintendo 3DS to good use, as I have already publicly stated. However, given that it has now become clear that we have not yet fully communicated the value of our product, we will try to do so before the software lineup is enhanced and at the same time work to enrich the software lineup which could make consumers understand the appeal of Wii U.” (Links added for context.)

Translated from corporate speak, the message is clear: “The Wii U isn’t too expensive, we just haven’t done a good job convincing enough people why it’s worth the price.”

Read 4 remaining paragraphs | Comments

Skulls of the Shogun: Turn-based strategy finds fresh blood in… cannibalism?

Ahead, across the river, lies my foe’s most precious possession: a stone shrine. The enemy’s healer monk, summoned from that very shrine, has grown far too powerful during battle. At this point, my only hope for victory is to run my fastest horseback rider across a field of dead bodies to break that shrine down and claim the monk as my own.

But not yet. I’ve ordered the horseman to stand down and let another army’s infantry, who hold the higher ground at the bridge, deal with the oncoming troops. We have a tenuous alliance, and before I break it, the horseman will grow more powerful by feasting on a pile of bones strewn along that bridge. Then he will ride unafraid.

Skulls of the Shogun’s cartoon skeletons and watercolor forests might make it seem like it doesn’t deserve such a pompous description. Really, though, despite the light-hearted aesthetic, this turn-based strategy game has a tight gameplay core that lends itself to memorable situations like these. The game also serves as a relatively undaunting entry into what can be a very complex genre, keeping its controls and character classes simple without emulating the experience-point progression or tragic losses of games like XCOM and Fire Emblem.

Read 12 remaining paragraphs | Comments