Hartley Richardson, President and CEO of James Richardson & Sons, photographed in his Winnipeg headquarters Wednesday, October 12, 2011.JOHN WOODS/The Globe and Mail
Five years after helping out GMP Capital in the financial crisis by backstopping a big fundraising, Winnipeg's Richardson family has exercised $27-million of warrants to increase its stock ownership in the brokerage firm. Unfortunately for the Richardsons, a slump in GMP's stock price means the warrants were right at the money even half a decade later.
Insider filings showed James Richardson & Sons Ltd. exercised 4.2 million warrants at $6.50 apiece, right where GMP stock has been trading lately. Richardson waited right until the end of the five-year exercise period before pulling the trigger on the final day. Richardson also appears to have purchased about another 400,000 shares in the open market, taking its total stake in GMP to just shy of 25 per cent.
The exercise means a cash infusion for GMP at a time when it might come in handy. The firm is not short of capital, but profits have been skinny for many quarters in slumping markets for trading cash equities and for resource transactions.