RE:RE:RE:Way undervalued right nowRegarding control of the company, you need to look at pages 10-12 of the most recent Management Information Circular. Here are the key passages:
The Corporation has authorized capital of an unlimited number of Class A Subordinate Voting Shares and an unlimited number of Class B Common Shares, each without par value.
As at the date hereof there were issued and outstanding 8,966,624 Class A Subordinate Voting Shares and 2,778,300 Class B Common Shares.
The holders of record of the Class A Subordinate Voting Shares and the Class B Common Shares on March 30, 2020 (the “Record Date”), are entitled to receive notice of and to vote at the Annual Meeting and at any adjournment thereof
. . . . . . . .
Each Class B Common Share carries the right to four votes.
. . . . . . . .
As at the date hereof, Arathorn Investments Inc. beneficially owns 2,778,300 Class B Common Shares of the Corporation, representing 100% of the issued and outstanding Class B Common Shares of the Corporation and 748,110 Class A Subordinate Voting Shares of the Corporation, representing approximately 8.3% of the issued and outstanding Class A Subordinate Voting Shares of the Corporation. All of the issued and outstanding shares of Arathorn Investments Inc. are owned by William G. Hammond, Chief Executive Officer and Chairman of the Corporation.
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While this isn't quite as I had thought I remembered the matter, it confirms that Hammond has total voting control. Note that the B shares (with 4 votes each) are not listed. Hammond, through Arathorn Investments, owns them all.
I see now that there are a few sizable institutional holders of HPS: Foyston, Gordon & Payne (17.6% of the A shares, recently lowered to 15.9%) and Fidelity Investments (10%). They know that they have no voting control at all because Hammond controls (via the B shares) a clear majority of the votes.
Absolute family control is not always an entirely bad thing. Probably the best known case in Canada was Magna International, controlled for many years by Frank Stronach (through super-voting B shares). And Magna was a huge success story.
But the family control is a red flag. Bear in mind that one of the signs of a good board is that it can, when necessary, make a management change at the highest level. And, believe me, sometimes it's necessary. But at HPS the board simply has no such authority. Hammond will be at the wheel until he chooses not to be.