Monday, January 2, 2012

Big Mountain's New Mogul

Mogul originally referred to a member of the Mughal Empire, or any member of its ruling dynasty, but in business has come to mean magnate, a prominent person in a particular industry. The Great Northern Railroad was built through Whitefish, MT, in 1904, initiating development of the town known at that time as "Stumptown" for obvious reasons - early employers were the railway and logging industries. By the late 1940s, with the successful construction of Big Mountain ski resort, the tourism sector became increasingly important. And now here's something I didn't know: "Some long-time residents of the town have expressed dissatisfaction with the changing of the name of the local ski resort from "Big Mountain Ski and Summer Resort" to "Whitefish Mountain Resort". The name was changed in June 2007, after Bill Foley, chairman of Fidelity National Financial, Inc., joined the board of directors for the resort. Foley began to buy commercial property in Whitefish around 2006, including several of the town's most popular restaurants, the private jet facility at the local airport, and a voting majority of shares in Winter Sports, Inc., the private company which runs Whitefish Mountain Resort on Big Mountain. Wealthy investors like Foley and others who have taken an interest in Whitefish have encountered a negative reaction from some local residents who fear that the town will be irreversibly changed by outsiders. In May 2004, WSI conducted a 150-for-one reverse stock split. Its stated purpose was to lower expenses by reducing the number of shareholders below the threshold that imposed public reporting requirements. At the time the transaction was proposed, 664 shareholders, or 72% of investors in the company, each separately held less than 150 shares. In total, these investors held a 2.5% equity (and voting) stake. The board expressed concern that the transaction might be viewed as coercive, but after review and outside consultation decided the transaction was fair to the affected shareholders. In December 2006, WSI conducted a 15-for-one reverse stock split, further reducing to about 50 the remaining shareholders in order to provide a tax advantage as a Subchapter S corporation. Again, all shareholders without enough shares to exchange for a post split share were required to cash-out their stock. WSI's handling of the reverse split was criticized and resulted in animosity within the local community, where there were objections to the timing of the related announcements and the loss of a community connection to the resort by the local residents." (Wikipedia) And I thought it was only those damn Canadians that upset everybody!