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Sep
30
Shareholders wait for new business opportunity to bring value to shell company
Posted by: Gerry Wimmer
09/30/2013
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Chinook Tyee Industry (TSXV: XCX) emerges from the remnants of Global Railway and the stock is ready for a new beginning.

This is not a blog post for a new Top Idea for Investorfile small cap value stocks (just yet). 

Global Railway Industries was a shell of its former self. The small cap growth stock once attracted the attention of many analysts and institutional investors but fell victim to poor management decisions and bad timing in 2008. The Company was forced to divest its assets to pay back substantial bank debts (See: Expect the unexpected from small cap companies with debt). With no operating business left, Global Railway Industries was transformed into a shell company holding a public stock listing and cash.

Last month the final connection to Global Railway Industries was cut. The Company was renamed Chinook Tyee Industry Limited (TSXV: XCX -$0.53). But still present from the old Global entity are legacy shareholders (including myself) who decided for better or worse to hang on to their share holdings with the anticipation that one day the value of owning a publicly traded shell company will surface by way of an acquisition (or roll in) of a viable business opportunity.

It now appears that day may be coming. Why? 

The small cap market is on resurgence. This attracts private growth companies who seek immediate access to the capital markets by merging with a publicly listed shell company.

Chinook Tyee Industry is a first-rate public shell company. The Company holds approximately $3.4 million in cash assets ($0.95 per share) and has no contingent liabilities. Currently, Chinook Tyee has only 3.47 million shares outstanding. An amalgamation with an existing business operation and subsequent add-on financing would not entail the issuance of tens of millions of new shares which would significantly dilute existing shareholders. 

Chinook Tyee management is currently seeking to identify and evaluate potential businesses opportunities. The Company's new leadership team controls over 35% of the Company's stock paid for at cost base of approximately $0.90 per share and is therefore motivated to realize a return on this investment. 

For shareholders of Global Railway the time is now for Chinook Tyee stock to begin a new life. 

Author's Ownership Position: TSXV: XCX Yes


Read Disclaimer: 

This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness.
The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

Investorfile.com is not engaged in an investor relations agreement with Chinook Tyee Industry Limited nor has it received any compensation from Chinook Tyee Industry Limited for the preparation or distribution of this article.


The author of this article has acquired and may trade shares of Chinook Tyee Industry Limited through open market transactions and for investment purposes only.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.