23 Jan 2009
0 CommentsAttacking a Canadian Icon
While I’m hardly a shrinking violet, I generally shy away from newspaper coverage. That being said, after saying no several times to Gordon Pitts at the Globe and Mail, I finally agreed to be quoted. Here’s why.
Yesterday, Jim Balsillie won the Laurier Outstanding Business Leader of the Year Award. With his business, economic and philanthropic contributions to our area and Canada as a whole, I can’t imagine a more deserving recipient. It is truly inspirational to have people like Jim making a real difference to all of us.
In an unfortunate coincidence, on the same day, both Jim Balsillie and Mike Lazaridis were the subject of media coverage regarding a possible (and staggering) $100 million penalty regarding a stock options pricing case dating back to 1996.
In the current financial meltdown, many might believe that ever more zealous regulation is the answer, but this really isn’t the root issue here. And, bearing in mind that I don’t have all the facts that the OSC and SEC possess, I present some key points in questioning the motives of the timing and magnitude of this regulatory action:
- from my reading of this case, the company, when made aware of the concerns, proactively launched a board-level investigation and, upon the release of the report, about $1.6 million was repaid, this being the estimated amount of gain based on the differential of pricing and dates of the option strike prices.
- further, that committee, found that the mis-pricing was inadvertent and not done for the purposes of financial gain.
- when compared to other securities regulation actions, this case seems minor, especially given the wealth most people have generated with RIM. In other words, there don’t seem to be any real victims here.
- And yet, over the last 10 to 15 years, the OSC has been colossally impotent when it comes to prosecuting real shareholder frauds, such as:
- the many cases of equity monetization that allowed senior management of many companies pocket tens or hundreds of millions while ordinary investors ended up suffering staggering losses.
- real abuses and frauds around income trusts, such as is the case of the many people in my home town of Listowel who lost life savings on the fiasco in which a long term business, SpinRite, was hollowed out in the process of becoming an income trust.
- Diane Urquhart, an ex Bay Street investment banker and now expert shareholder crusader, is a great source to provide anyone who is interested the documented evidence of how much of a wussy our own OSC has been in stock market regulation.
- Jim, and his partner Mike, have each given countless hours and hundreds and hundreds of millions of dollars to major philanthropic initiatives that, in addition to helping to transform Waterloo Region, have national and international stature.
It’s this background that left me feeling compelled to comment to Gordon at the Globe & Mail. Clearly, this feels like a desperate OSC acting on the basest political motives.
I’m not sure why Canadians feel that we have to attack our winners. At a time of economic meltdown and too few national champions left standing, why can’t we celebrate the great heroes we do have?
2 Jan 2025
0 CommentsWaterloo Tech – Ancient Acetates from the Early Years
Happy New Year, 2025!
During personal housecleaning, I came across a file folder, with the overhead acetates of a Powerpoint presentation I had thought long vanished.
Back in 1993, Yvan Couture and I co-founded a CEO group for Waterloo area (then including Guelph) technology industry CEOs, later known as Atlas Group,. By our second year, we had all gained immensely from a forum where we could learn together in a peer-to-peer mechanism. And as most of us were jet-setting, high export business leaders, it was good to reflect on what we could share locally in our community. As we compared notes, we realized that we needed to work together to better tell our story, including to various levels of government who had yet to fully understand the transformative potential of the new knowledge-based business paradigm we represented.
On October 27, 1994, we chartered 2 small planes from Waterloo International Airport to fly 15 of us to Ottawa to tell our story to the federal government. Assisted by the late Andrew Telegdi, Waterloo MP at the time, we booked meetings with John Manley, the iconic Minister of Industry, Jean Chrétien, Canada’s Prime Minister, and Ottawa tech leaders, such as Michael Cowpland.
We collectively developed the following Powerpoint to present up in Ottawa, and the group asked me to present to our leaders. The featured image on this posting is a photo taken in the Speaker’s Library in the House of Commons.
The following is the recently uncovered Powerpoint from October 1994.
Ottawa Delegation Powerpoint Oct 1994The following is a scan of the base data used in preparing the Powerpoint, giving an impressive 5 year growth trajectory.
To make it easier to read, I have re-entered the data in a table below.
Some observations that are reflective of those times:
Since Waterloo’s tech industry started in the early to mid 1990s, it took a decade for this first generation cohort to gain critical mass, and also to start to do major financings. Within 1-2 years of our Ottawa trip, the majority of us had done an IPO, Special Warrant Transaction or were acquired.
The second part of the Powerpoint presentation talks about a proposed “Internet 2000 Consortium”. Although I’m hoping someone can remind what ultimately happened to this visionary proposal, the idea was to get the entire Waterloo community (business, government, schools, etc) working together to make the region an internet powerhouse. For example, MKS was shortly to release MKS Internet Anywhere, followed by the world’s first Web Content Management product MKS Web Integrity. Open Text produced Open Text Web Index one of the world’s first internet search engines which was sadly outspent first by Digital Equipment Corporation‘s Altavista and later Google. Although we reserved our domain (mks.com back in 1985, the internet was still dialup in nature. To transcdnd that, several of us shared costs of a T1 (a fixed broadband connection at a blazing fast 1.5MB/sec rate).
Collectively, the presentation highlights rapid growth and economic impact, and predicts big things ahead:
This delegation proved that the Waterloo tech phenomenon had moved beyond a few visionary entrepreneurs to becoming a true force in the Canadian, and global, economies.
The Atlas Group continued for several more years — eventually passing its peer-to-peer leadership torch by building an organization bigger than any one of our companies. The group wrote a business plan and also wrote cheques (and yes people still used paper cheques back then) to fund a year long experiment they named Communitech. That legacy of entrepreneurs trying to collectively move the needle on a tech growth engine for both the region and Canada, lives on today.