Red mtn crowdfunding

Im sure by now we've all heard about Red's crowd funding proposal, and I'm sure there's lots of opinions in it as well.   What are some of the thoughts that people of this community are having?

If I were looking at this from purely an investment/financial gains perspective (which is tough to separate, because this is a local hill that holds a special place in a local's heart), I still can't figure out what the hell I'm in investing in.

Unfortunately, it looks as though Mr. CEO is trying to tug at local heart strings to garner up some finances rather than presenting a case for a sound financial investment ....I hope I'm wrong, but until more information is released, that's the best we have to work from....

It's pretty clear that your investment gets you into the special VIP club on Grey, which is important because we need another lodge. Further, we need a place to separate those who don't own the mountain and can only afford to pay for their season pass and who have to save to be able to afford rafters nachos. That really fits with the messaging they chose as a lead in to the investment "...but have consciously maintained our mom ’n’pop/weird uncle feel for over 100 years. We’re tired of seeing families priced out of a premier ski vacation by Mega Resorts."

We all love skiing RED, no doubt we are very lucky to have it in our backyard.  And locals appreciate creative ways to keep the mountain progressing and remain viable. There is a reason major companies are buying multiple resorts. The year to year variability of profit in owning a ski resort can be difficult to handle for a single ownership group with one resort in today’s climate.  Having multiple major resorts allows you to weather the storm in a way, as some resorts will do better in some years than others. Regardless, the profit margins must be slim overall, especially projecting 50 years out. Makes sense Vail would buy another resort that is further north compared to their other ski areas, especially one that can deliver consistently in the summer as well.

I would invest in a small chunk of this if there was a vision/plan for how this would result in a real change for the statement of "We’re tired of seeing families priced out of a premier ski vacation by Mega Resorts". That is important for the community vision RED puts forward.  As currently proposed, i don't see how the upgrades will result in cheaper ski vacations for families. If it is simply to raise money to keep the mountain viable, be very clear in that messaging and be transparent in the areas funds are required.  I'd buy into that as well. Accessing grey and granite from Silverload seems like a higher priority than another lodge, but i just want fewer people in the Needles area heading to Grey on their first run so i can get an extra lap or 2 in there. 

 

  

My one big concern about this endeavour is that, imo, Red only gets one shot at this. If this effort doesn't succeed, for instance, and owners change in the future and/or the current ownership decides to pack it in, another party will have a very difficult time attempting a similar approach down the road...even as a proper co-op. Once bitten, twice shy sort of thing.  So if they are going to attempt this, I'm hoping they are all in and have good intentions as they say.  For Rossland's sake, this cannot be a crowdsourced corporate bailout.

This also cannot simply be a market research activity designed to drum up interest or 'free' good press, because the resort may actually "need" this approach down the road more than it does now (for instance if it one day ends up actually being community-run once again as a proper co-op).  Not saying it doesn't "need" it now, but without financial figures rleased who knows other than the ownership group/corp themselves.  In other words, hoping they aren't crying wolf on this.

I don't quite understand it either. I didn't think ski hills made money with pass/ticket sales. I thought they made money selling real estate. So they build the attraction which increases the property value and then develope and sell the properties around the attraction... As we are located in a geographically challenging area to access...we have a hard time getting high tourism volumes. Airports are fogged in, mountain passes are stressful...IF RED were to sell to some big coorporation....how would it change? Airports are still fogged in...Mountain passes are still stressful.. 

Pretty clear in today's paper, right? 

So we own it and are shareholders but, we don't get dividends or have a say in the company. Instead we get either temporary over-priced rewards (similar to the 25$ CD you can get from PBS for 200$) or as was mentioned above membership to an exclusive club all in the name of bringing skiing to the masses. Am I getting this right? What am I missing, it seems like mixed messaging to me.

FWIW I think the resort has done an excellent job since taking over, there have been a few hiccups for sure but all in all we (the snow sliding community) are further ahead than we were in 2003.

The best I can figure it's a one time donation towards future development with some one time rewards at the lower levels, and some longer but not permament rewards at the higher levels.  I wouldn't consider memebership in a clubhouse that hasn't been built a reasonable reward, not to mention what would be the projected cost of said clubhouse, how much of the crowdfunded money would go towards building the reward for invesment?  The top on Grey isnt exactly an ideal building site for construction.  If the lift tickets were an annual perk instead of a one time deal, that would be a lot more incentive to invest.  Calling this and investment in ownership is a farce, no divendends or voting rights, isn't that what basically makes up ownership?    Again, this is a donation towards future development, and if that's important to you, then have at it.

  Playing this up as preserving the community and what we have here is and doing it "for the people", "community before commerce"....ummm yeah, okay.  Anybody else remember when they wanted to put a golf course in our watershed?  Remember the protesting, debates and oppostion?  City council voted 6 out of 7 in favour of the development, because if they voted it down, the resort was going to take it to the provincial level to put it through.  They didn't give a damn about how it would affect our community, they didn't seem to care if well over 80% of the town was vehemnetly against it.  Thankfully city council was clever enough to vote it through WITH the condition that the developer come of with a multi million dollar bond to secure against infrastructure upgrades including roads, power, sewage and environmnental damage.  When they couldn't come up with the money they dropped the project claiming it was becuase of opposition from the community.  How could they claim that when the city voted it through?  They couldn't come up with the funds to start so they dropped it, maybe they should have tried crowdfunding it.

  Like it or not the ski hill we used to have here is gone, it's a bussiness now.  And as a bussiness it has to make money (which it does, they have posted that they made an 11% increase in profits),if we want to see that chairfilt keep turning.  Part of making a profit at a resort is increasing skier visits by improving the product, and in turn raising the equity of the resort itself to make real estate more valuable to sell and generate revenue.  Any way you look at it, resorts are the wolf in sheeps clothing, sure we get improvents (lodge reno, grey chair) but they're here to make money.  And whatever way it happens, we stand some price to pay.  Be it a busier ski hill and lineups (gasp!) or an exploitive golf course, the resort needs to progress to stay competative and open.

  That being said, it would be nice if they took a more honest approach.  They're not selling ownership, they're raising infrastructure capital so they can move forward with developing the product.  Nothing wrong with that.  This whole song and dance about doing it for the community, kind of true.  Future development will help keep the ski hill operational which is really the heart of this town, but first and foremost it's about profits and making money, they're tugging on our heart strings because they want our money.

  Sometimes you have to sleep with the devil to ski the heavenly pow.

Based on the limited information available at the moment, the investment aspect of this proposal makes little sense. Until financial statements are made public, there is no way to properly value the investment. As Warren Buffett said: "Price is what you pay, value is what you get" and without audited financial statements, it is simply impossible to come up with a valuation for the company.

There is also the issue of the special share class, coming without voting rights and without a dividend. This is ludicrous. Dividends are paid from a company's profit. They are charged against retained earnings and thus decrease shareholder's equity. In other words, if the "real" shareholders were to pay themselves a dividend (and I would not be surprised if they do given the tax advantages attached to receiving payments in the form of a dividend), it would reduce everyone's equity, not just theirs. If this sounds bad, well it is.

In principle, nothing would stop MegaCorp Inc. from snapping up all the shares made available to the public by this offering, but something tells me it won't. This might be the best indication that the proposal is not such a good deal after all, at least when only considering the investment aspect of it.

What's stopping Megacorp from buying all of the public offering is the limitiations.  If there's no payout and no voting rights, there's really no reason to "invest" becasue there's really nothing to gain from an investment standpoint.  As from wikipedia:

"To invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future.

In finance, the expected future benefit from investment is called a return (to investment). The return may consist of capital gain and/or investment income, including dividends, interest, rental income etc. The economic return to an investment is the appropriately discounted value of the future returns to the investment."

  So if there's do divendend return, this can't be considered a financial investment, there's no direct financial gain possible.  It IS however an investment in future development, with the payout being a more developed resort, if that's what you want.  But it's also not a stake in ownership by any means, it's not buying stocks in the resort, it's giving them money for devlopment.  Again, drop the deception and call it what it is, a one time donation to Red to further develop the resort.

If this is a public offering of shares (certainly with more than 50 investors hoped for ) are they not required to file a prospectus and produce financial disclosure? See bcsc.bc.ca

If this is a public offering of shares (certainly with more than 50 investors hoped for ) are they not required to file a prospectus and produce financial disclosure? See bcsc.bc.ca

But that's just it, they're not selling shares or actual ownership, they're collecting "investments" in exchange for lift tickets, season passes and special privledges.

Think I'll just invest in an early bird seasons pass, put the other 4 grand in a TFSA and buy penny stocks.

I'll probaby still come out a head and the end of the day.

 I also find it unbeleivabe that this group is GIVING us the opportunity to fight the man....He is the man. The golf course they were going to put up there in our watershed is proof of that.

Hows the lift access mountain biking coming along they weren't getting rid of permanently? 

 

One of many nice things about Rossland is the lack of division due to social/financial status. I've seen parties where the orthopedic sugeon is talking with the dishwasher, the liftie is skiing with the Regional Director; the brand-new expensive home sits next to a miner's shack and they all drink tea or beer together and no one cares.  

Not only does this invite to "invest" seem more like a request for a donation; but also one of the rewards serves to create this kind of division. Invest enough and you and only other monied people like yourselves can go into the "exclusive" lodge atop Grey. Really? Who wants to invest in something that half their friends can't do with them? And to create this kind of division with no other plan to "keep it affordable?" 

One of the basics of marketing is to tell potential buyers "what's in it for me?" (WIFFM.) They haven't done so. Aside from a few lift ticket perks and the absurd notion (in a "local's" area) of excluding skiers from a lodge that only the wealthy can access, there are only vague suggestions of future improvements. Everyone who skis there wants Red Resort to make a profit and continue to operate. But this is not the way to do it.

Not unless there is a clear plan stated that includes return on investments. And ditch the divisiveness, please. Rossland is not San Diego. We like our community - our common unity - and don't need someone trying to divide us by class.

Well, Thatguy, the mountain's website, redresort.com, says it is offering equity ownership via crowdfunding. It goes on to say that this is 'round one' and that the subsequent rounds will see investors as 'actual owners' of equity in the hill. A sale of equity is a sale of a share of the company no matter how you dress it up. Not clear if is to be voting or non-voting shares(but I can guess). My point is that I am not certain if it is fair to first try and find the investors and only then do the filings and disclosure provided by law to protect investors from investing blindly in things without knowing what it is they are buying. I have never seen this 'two-step' which seems to be designed to circumvent the legal protection built  in to an equity offering by various security laws. I assume they have sought legal advice but the issue remains for would be investors.

you will never ever get your money back. never.