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As retailer investors we are not playing on a level playing field. Unless we are accredited investors, we probably won't be able to participate in Private Placements to get discounted shares and warrants. We won't get cheap options to exercise over the next 5 - 10 years, we won't get Founders Shares for a fraction of a penny, we run the risk of being sucked into pump and dumps, we unwittingly invest in companies that are running cheque swapping schemes, we don't have the insider knowledge that some have and between work, family and life we don't have the time to do the due diligence like the research staff of Funds/Institutional investors.
What if I told you that there is a better way to more effectively use our time, to be able to do more due diligence, so that we can have access to more information in less time. Instead of having hundreds of people spending time collecting the exact same information independently, what if those same people pooled their resources and collected information as a team. This is where wikis come in.
I love the idea of crowd sourced wikis. They could be one of the best, yet underutilized features of CEO. No noise, no bullish or bearish promo/opinion, no arguments, just facts about the company.
There are thousands of users on CEO. Think of the potential if all of them just spent a little time on wikis. There could be an incredible database of information that we could use to make wiser investment decisions. That's also the problem, there are thousands of users on CEO, if all of them spent just a little time on wikis without guidelines and consistency it would be like herding cats.
When I first asked about helping with the wikis, there were some that had already been created and a couple are quite good. Most had been started and then abandoned. I get it, it was a little intimidating in the beginning, and it does take time to source the information and build a wiki.
I began fiddling with different formats and thinking about efficient use of my time, consistency and best practices. I started with creating a prototype template (https://wiki.ceo.ca/template) which I've tweaked a couple times. I also thought about citing sources so with most sections in the wikis, I've either cited the source or linked to it.
If you haven't seen them and have no idea what I'm talking about, here are links to a few of the wikis I've started:
If you haven't been to the wiki home page at https://wiki.ceo.ca yet, it's a good place to start. It has some brief general guidelines on what should and should not be contributions to the wikis, it also has a disclaimer that all should read.
I am not a financial adviser and don't necessarily believe my ideas are always the best ideas (I once taunted the big old boar in the pasture on a dare. Let me tell you that hogs can run a lot faster than you'd think) so I'm looking for feedback.
- Is there a more efficient way?
- Wikis are not just for resource companies, can the template be used for pot stocks? Biotech?
- Is there anything else that the community would find useful in the wikis? For example, @janturco suggested adding the tickers (CA, AX, L, OTC) to the template.
Please post any suggestions/feedback in the #wikis channel. I really appreciate anyone's participation in this, even if it's just a thumbs up on a good suggestion so I can get an idea of what is important to the community.
The other variable in how extensive the wikis will be, is how many are willing to help by contributing to the wikis? Like most things in life, the more you put in the more you'll get out. I can think of lots of things that could be included but if I'm the only one doing them results may vary. Please give this article a thumbs up if you are interested in helping with building the wikis so I can get a general idea of what we can accomplish.
I've broken down the current sections on the template, provided time ranges on how long it could take and added some notes about things I noticed while building them.
Corporate Description: (10 - 20 minutes) I only included the Fact Sheet if it was more up to date than the Corporate Presentation. Is this something that should be added to all wikis?
I was surprised but some companies don't have any social media and other companies don't have links to their social media accounts on their websites (at least that I could find) so I did a quick google search for each company name with Twitter, LinkedIn, Facebook and YouTube
Directors and Management: (30 minutes - 2 hours) Some corporate websites have thorough backgrounds on the leadership, others not so much. Some Executives had LinkedIn profiles, others did not. There is also a "Directorships" table in the Management Circular that lists any Directors that are also currently Directors of other reporting issuers. I had to do a lot of verifying as information on Bloomberg and Reuters are just data scrapes with no verification so the information can't be taken at face value (example: they have Richard Johnson, CFO of GFG, also working as the CFO for Crest Petroleum - Crest Petroleum did an RTO of GFG in 2016 and all Crest Directors and Management resigned at the time of the RTO. This came up before about a different executive potentially linked to the Bridgemark scandal - if interested see more here.)
Effective leadership is one of the more important, if not the most important component to the success of any organization. The amount of work involved, to just add some brief notes in this section does not do this justice. I'd rather leave the notes section out for now and depending on how many are willing to help with the wikis, revisit the possibility of creating Management/Director wikis in the future.
Share Structure: (10 - 20 minutes) I used the information in the MD&A. It's usually as of the release date of the MD&A, whereas the table in the Financial Statement is as of period (quarter/year) end.
Options Outstanding: (10 - 20 minutes) All but 1 company had clear tables with quantity, exercise price and expiry date listed in the financial statements. I adjusted the table for the outlier.
Warrants Outstanding: (10 - 20 minutes) All companies had clear tables with quantity, exercise price and expiry date in the Financial Statements.
Insider Ownership: (15-20 minutes) I prefer to go to the source whenever possible, so I pulled reports from SEDI. It's always interesting to see which insiders intentionally align themselves with retail shareholders by regularly buying on the open market....and which ones NEVER buy on the open market. They're only experience with the open market is selling. Also see note on Prior Sales below.
Liquidity & Capital Resources: (10 - 20 minutes) Current Assets and Liabilities easily pulled from the latest Financial Statement. Then it's just a matter of subtraction to figure out the working capital.
Financing History/Prior Sales: (depends on how many financing's 30 minutes - 2 hours) For the most part I got this from the press releases on the corporate websites. Unfortunately, not all companies are good about posting press releases on their website, so I verified with the financial statements. I started linking the financing to the news releases so that just the basic information is included in the wiki and people can click through for details (I did add some notes for special circumstances). I did not include Prior Sales (pre-IPO) in the wikis (except for Fireweed Zinc because someone had already posted them). *Note: I don't know if Prior Sales is something that is important to the community but if you have never looked at a Final Prospectus, I suggest you do. That insider with a couple of million shares may not have as much money at risk as you.
Termination & Change of Control Payments: (10 - 20 minutes) This is in the Management Information Circular filed on SEDAR. Most of the time it was clearly laid out, so I just copied and pasted it from the circular. At least once it was super complicated so I had to reformat the layout so I could understand it. It should be updated when the new circular comes out. I cited the date that the Management Information Circular was filed on SEDAR.
Corporate Highlights: (15 minutes - 2 hours) I started by just giving a brief description of each project, then @MiningBookGuy suggested linking the project page so I did that for a couple. Eventually I decided it may be better to provide a table for each project with dates and press release headlines that are linked to the press release.
Much like the Directors and Management section, if there is enough interest in wikis, it may be more useful to have a separate wiki for each project so that the history of a project can be tracked as it changes hands.
The Fine Print
Disclosure: The author does not own any shares in any companies mentioned in this article and is not compensated in any way for wikis, I'm just giving back to the community.