One way or the other, a lot fewer shares in Winter Sports Inc. (WSI), the corporation that owns and operates Big Mountain, will be available in the near future. Whether or not locals will hold onto any them remains in the air.
According to Fred Jones, CEO of the corporation, shareholders at a Nov. 28 meeting voted to approve a reverse stock spilt that would reduce every 15 shares of the company to one, with WSI buying out any shareholders holding less that 15 shares.
A shareholder buyout in 2004 reduced the number of stockholders from 500 to 200 with a reverse split of 150 shares to one. That resulted in fewer Montana residents holding shares in the company, and more out-of-state shareholders than locals being nominated to the WSI board for the first time since WSI was formed.
All the local board members who remained after 2004 own too few shares to survive the latest round of consolidation. But they’re not out yet. Before the latest split is final, WSI has to file it with the state. Jones says that shareholders decided to hold off on filing while locals explore the possibility of somehow merging their shares.
That prospect, Jones says, “gets complicated.” Normally, only individuals are allowed to own shares in an “s” corporation.
The purpose of the reverse split, he says, is to allow the company to become an “s” corporation under Securities and Exchange Commission rules, in which profits and losses confer directly to shareholders. The classification, Jones says, would decrease WSI’s tax burden.
Jones says that whatever the result, it will have little tangible effect on the community.
But Whitefish resident Dale Duff thinks differently. His father bought him multiple shares in WSI about 40 years ago. After the 2004 split, he owns only one. He doesn’t think there’s anything sinister about WSI’s decision, but he does think it’s in WSI’s interest to retain local shareholders.
“We provide a link to the community,” he says. “[WSI] buys a lot of good will with that.”