Gamehost Inc T.GH

Kasking discussing past $0.0733/mo or $0.88/yr

[malx1]

Have to apologize.

Kasking mentioned $0.0733/mo divs.  He was right.

There was $0.88/yr up until mid-2016.

Company converted to corporation from Income Trust in 2011. 

Held up the dividend for 5yrs but had to reduce it to take pressure off payout ratio.

Trusts didn't pay corporate tax, but corporations do.



Next climb is to $0.72/yr, the $0.06/mo

[BarstoolSage]

I lost my position in a wonderful company, "Oceanex" because of that Finance Canada decision ...but back in 2007 Essentially has a monopoly on freight between Montreal and Halifax to St John's One of its captains, a Sid Hynes, assembled a group, offered far less that it was worth but more than the trading price, and everone tendered their shares, Mine just disappeared one day

[malx1]

Income trust sector could have been preserved if they just capped co's at $1B market cap. the little guys would have been able to push into USA with acquisitions Canadian competitive advantage

[BarstoolSage]

Finance's concern was the erosion of the corporate tax base. The tax burden did not shift entirely to Canadian unit holders and Canadian tax coffers because the status of the holder determined their tax position PLUS the income trust could designate part or all of their payouts as a "return of capital", meaning they are giving you back part of your original investment...which is not

[malx1]

Sage, long conversation, and I see and respect your perspective. The trusts here today that collect royalties for shareholders are still subject to corporate tax. REITs were exempt if I remember correctly. With that said, I detest double-taxation.  Yes, there is leakage if foreigners held Canadian-based Trusts.  But overall, I saw the trust structure as a tool that provided a higher

[BarstoolSage]

I'm going to treat it like the elephant you have to eat.

[BarstoolSage]

You make really good points here and as I recall, at least your second was widely discussed when the change was made  Lower income seniors who could invest in the ITs definitely enjoyed boosted cash flow and paid little tax, and they definitely got hurt by the conversions back. CARP was definitely on the warpath I don't remember a lot of discussion on point one but that is my memory

[malx1]

No problem Sage.  I'm a bit of a business Nationalist.  Stubborn.  I like to watch Canada get some rare wins. Back to the trusts.  I remember identifying some businesses taking advantage of the structure, barely profitable, too cyclical, and then got hammered when converting back to corporation or prior. Davis & Henderson...  there was 30yr old peat moss business

[malx1]

Valuations matter. Let's just pretend that GH was trading at 15x EV/EBITDA as income trust with $500mm market cap. Maybe that value is stretched but that is for the investors to decide what is fair value. Then a business like GH could sniff out a quality peer, say a private co, that is for sale at 12x EV/EBITDA. 20% discount transaction plus the elimination of some duplicate white-collar