There seems to be a lot going on at Route1. I’ve written about this company on a few occasions, and I use their product in my daily existence as it’s a good product. I’ve also been expecting a big breakthrough at some point this year since they scored a major deal with the US Department Of Homeland Security. Last week seemed to be the beginning as they released their second quarter statements last week and it showed an eight fold increase in revenue. But later in the day some storm clouds appeared to dampen things. First the news hit the wires that the founder and CEO of Route1, K. Andrew White was looking to replace the board of directors at the annual general meeting of the company later this year. One of the board members that he wants is former Ontario Premier Mike Harris who had this to say:
“I believe Route1 has turned a major corner and is now poised for significant growth,” stated Michael Harris. “I am excited to serve on a Board that works with a management team led by Andrew White. He has built a business in an area of world leading technology, this is exactly the kind of company that Ontario and Canada need.”
Why does he want to replace the board? I’ll let him explain:
Mr. White approached Ian Currie, the current Chair of the Board of the Company, in May 2009 about making significant changes to the current Board of Directors to better reflect the needs of the Company as it moves into 2010 and beyond. Specifically, Mr. White is of the strong belief that the current Board is not engaged in supporting management in the furtherance of Route1’s business objectives. To date, the Board has resisted making any changes to its composition.
And:
“Route1 is currently handicapped by a disinterested Board of Directors that has provided minimal support to the initiatives of management. I am disappointed that the reaction of the board to my proposed changes is to seek to entrench themselves at the expense of the company,” Mr. White said. “As shareholders we expect and deserve to have a Board of Directors comprised of engaged business leaders who have personally delivered transformative value to shareholders and stakeholders. We want individuals to join our board who want to work with management to deliver on the exceptional shareholder value creation opportunity that is real and present.”
Later in the day came a press release that Mr. White had been removed from his job as CEO of the company and he had been replaced by Dean Peloso who is a member of the board of directors. The company then issued another press release two days later with their side of the story. This sent the stock down from $0.10 a share on July 21st to as low as $0.065 a share at one point during the day July 24th. Not good if you’re an investor, but completely understandable given the uncertainty that this situation creates.
However today brought good news to the Route1 camp. The Government Of Canada has awarded Route1 a National Master Standing Offer (NMSO) to buy their products. The NMSO is worth up to $20 million CDN which I would think would add a significant bump to their bottom line. Investors clearly think so as the stock has shot up to $0.09 a share as I type this.
So, what does this all mean? The breakthrough that I thought would come this year is starting to happen. That’s good for Route1 as it seems that they are going to be the next great Canadian success story. However, the situation with the removal of their founder and CEO as well as the attempt to replace the board creates some uncertainty that may derail this.
Hopefully this situation gets sorted quickly and Canadians can watch another high tech company rise as it would be a shame if this company and their really cool technology couldn’t realize their full potential.
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This entry was posted on July 27, 2009 at 9:43 am and is filed under Commentary with tags Route1. You can follow any responses to this entry through the RSS 2.0 feed.
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It Was The Best Of Times, The Worst Of Times, And The Best Of Times At Route1
There seems to be a lot going on at Route1. I’ve written about this company on a few occasions, and I use their product in my daily existence as it’s a good product. I’ve also been expecting a big breakthrough at some point this year since they scored a major deal with the US Department Of Homeland Security. Last week seemed to be the beginning as they released their second quarter statements last week and it showed an eight fold increase in revenue. But later in the day some storm clouds appeared to dampen things. First the news hit the wires that the founder and CEO of Route1, K. Andrew White was looking to replace the board of directors at the annual general meeting of the company later this year. One of the board members that he wants is former Ontario Premier Mike Harris who had this to say:
“I believe Route1 has turned a major corner and is now poised for significant growth,” stated Michael Harris. “I am excited to serve on a Board that works with a management team led by Andrew White. He has built a business in an area of world leading technology, this is exactly the kind of company that Ontario and Canada need.”
Why does he want to replace the board? I’ll let him explain:
Mr. White approached Ian Currie, the current Chair of the Board of the Company, in May 2009 about making significant changes to the current Board of Directors to better reflect the needs of the Company as it moves into 2010 and beyond. Specifically, Mr. White is of the strong belief that the current Board is not engaged in supporting management in the furtherance of Route1’s business objectives. To date, the Board has resisted making any changes to its composition.
And:
“Route1 is currently handicapped by a disinterested Board of Directors that has provided minimal support to the initiatives of management. I am disappointed that the reaction of the board to my proposed changes is to seek to entrench themselves at the expense of the company,” Mr. White said. “As shareholders we expect and deserve to have a Board of Directors comprised of engaged business leaders who have personally delivered transformative value to shareholders and stakeholders. We want individuals to join our board who want to work with management to deliver on the exceptional shareholder value creation opportunity that is real and present.”
Later in the day came a press release that Mr. White had been removed from his job as CEO of the company and he had been replaced by Dean Peloso who is a member of the board of directors. The company then issued another press release two days later with their side of the story. This sent the stock down from $0.10 a share on July 21st to as low as $0.065 a share at one point during the day July 24th. Not good if you’re an investor, but completely understandable given the uncertainty that this situation creates.
However today brought good news to the Route1 camp. The Government Of Canada has awarded Route1 a National Master Standing Offer (NMSO) to buy their products. The NMSO is worth up to $20 million CDN which I would think would add a significant bump to their bottom line. Investors clearly think so as the stock has shot up to $0.09 a share as I type this.
So, what does this all mean? The breakthrough that I thought would come this year is starting to happen. That’s good for Route1 as it seems that they are going to be the next great Canadian success story. However, the situation with the removal of their founder and CEO as well as the attempt to replace the board creates some uncertainty that may derail this.
Hopefully this situation gets sorted quickly and Canadians can watch another high tech company rise as it would be a shame if this company and their really cool technology couldn’t realize their full potential.
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This entry was posted on July 27, 2009 at 9:43 am and is filed under Commentary with tags Route1. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.