Canadian investor inspired by Warren Buffett sinks after founder sells

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June 11, 2024 / 08:35 AM IST

Wilkinson has sought to liken his investment style to that of Warren Buffett at Berkshire Hathaway Inc.

Canadian holding company Tiny Ltd plunged 16% on Monday after its founders stepped down as co-CEOs and one of them said he’d sell millions of shares.

Tiny mainly invests in internet companies. It said on Thursday that co-founders Andrew Wilkinson and Chris Sparling stepped down effective immediately to become co-chairmen, adding they’d remain “actively involved.”

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Then on Friday, a filing showed Wilkinson intends to sell as many as 3.1 million shares, or about 1.7% of the company, worth about C$8.4 million ($6.1 million) based on Friday’s closing price of C$2.7 per share. The disposal included a donation of shares to Wilkinson’s private foundation and gifts to family and former employees, according to a statement. Wilkinson still owns more than 60% of Tiny, according to data compiled by Bloomberg.

The company lost about C$80 million in market capitalization by the end of trading in Toronto on Monday, with trading volumes more than five times the three-month average.

“The majority of Wilkinson’s wealth is still in Tiny, and most of those shares were transferred to the Tiny Foundation, as well as to early Metalab and other employees,” a spokeswoman for Tiny said of the share sale.

“This was pre-planned for a long time and discussed in Andrew’s upcoming book, Never Enough, where he details his decision to give back to early employees who contributed meaningfully to the success of the company.”

Regarding the change in CEO to Jordan Taub, the company pointed to Wilkinson’s previous statement that Taub has “proven himself to be an exceptional leader” and that the change enables he and Chris to focus on relationships with founders, sourcing acquisitions, and setting the company’s long-term vision.

Wilkinson has sought to liken his investment style to that of Warren Buffett at Berkshire Hathaway Inc., and recently published an autobiographical book with the title Never Enough: From Barista to Billionaire. His backers have included billionaire hedge-fund manager Bill Ackman.

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In first-quarter results last month, Tiny posted revenue of C$49 million and an operating loss of C$4.3 million. It carries C$136 million in debt.

Before that, its fourth-quarter earnings in April were described as “lackluster” in a research note from Canaccord analysts led by Robert Young. Some C$3.3 million of losses on sales of subsidiaries last year “undermine the argument that Tiny’s investment record has been successful,” the note added.

The CEO of one of Tiny’s bigger portfolio companies, Dribbble Holdings Ltd, also stepped down in April, after seven years, according to his LinkedIn page.