Convicted OneThe article mentions that CSX itself bought a significant chunk of Mantle Ridge's holdings. That itself might indicate that the market would not support the list price. You might find there is a shortage of willing buyers right now. Call your broker and see what he says.
JPS1 Convicted One The article mentions that CSX itself bought a significant chunk of Mantle Ridge's holdings. That itself might indicate that the market would not support the list price. You might find there is a shortage of willing buyers right now. Call your broker and see what he says. On October 17, 2019, the day of the trade, CSX had an average of 777,644,212 shares of common stock outstanding. The company bought 4,692,334 shares of common stock from Mantle Ridge. The trade would have been approximately 60/100s of one percent of the outstanding shares. The trade probably did not have a significant impact on the price of the shares. On the day before the trade CSX common closed at $69. On October 17th, the stock opened at $70.96, hit a high of $72.12, and closed at $69.78 on a volume of 11,549,052 shares traded. On the day after the trade it opened at $68.61, hit a high of $72.12, and closed at $68. While the sales represented 41.2 percent of the shares traded on October 17th, the buyback or trade does not appear to have had a significant impact on the price per share.
Convicted One The article mentions that CSX itself bought a significant chunk of Mantle Ridge's holdings. That itself might indicate that the market would not support the list price. You might find there is a shortage of willing buyers right now. Call your broker and see what he says.
It is my feeling - Companies such as CSX have been using company stock buy backs of outstanding shares on the regular market as a means to keep the stock price high - so Wall Street will be duped about the real value of the company.
Never too old to have a happy childhood!
I find it unusual that Vanguard would let another entity that had less shares than it take a controlling interest in one of its investments unless they were tacitly behind it. It makes one wonder...
PS-We need more Ron Baron type investors.
JPS1 posted:
"While the sales represented 41.2 percent of the shares traded on October 17th, the buyback or trade does not appear to have had a significant impact on the price per share."
That wasn't my main point (LOL!)
The willingness of CSX to use it's treasury to take that stock out of circulation most likely saved Mantle Ridge from having to endure the perils of the market place in selling.
Supply and demand...you know the drill.
Personally,.....I would anticipate that with the gambit now concluded, a period of normalization will follow, that will precipitate lower prices.
On other fronts, I understand that several class ones are now being sued by some of their largest customers over the fuel surcharges that were such an item earlier in the Century.
Not really an attractive time to own a railroad, IMO, I'd sell if I could
JPS1“The willingness of CSX to us its treasury to take that stock out of circulation most likely saved Mantle Ridge from having to endure the perils of the market place in selling.” If CSX bought the stock at anything other than market price, the Securities and Exchange Commission would be all over it. And they would be followed closely by the company’s external auditors. Anything that even hints at insider trading is a good way to become acquainted with the inside of a minimum security federal prison.
Only if you are a 'little person' in the view of rhe SEC - hedge funds and Fortune 500 companies tend to be 'big people' with legal departments to match.
JPS1If CSX bought the stock at anything other than market price, the Securities and Exchange Commission would be all over it
(*sigh*) But, (given Mantle Ridge's decision to liquidate) what would have happened to the "market price" if CSX had not purchased roughly 1/3 of the shares held by Mantle Ridge?
Let's look at this another way....suppose a glut of available CSX stock is being pushed on the market.....what happens to the price?
Paul Hilal held onto a few million shares did he not? What just happend to the value of those shares due to this glut? By pulling 1/3 of the shares Mantle Ridge held back into the CSX treasury, you really don't see how that worked?
Convicted One JPS1 If CSX bought the stock at anything other than market price, the Securities and Exchange Commission would be all over it Let's look at this another way....suppose a glut of available CSX stock is being pushed on the market.....what happens to the price? Paul Hilal held onto a few million shares did he not? What just happend to the value of those shares due to this glut? By pulling 1/3 of the shares Mantle Ridge held back into the CSX treasury, you really don't see how that worked?
As noted above, the buyback a portion of Mantle Ridge's shares was immaterial. Prices hardly moved.
CSX filed Form SC 13D/A with the SEC. The transaction appears to be on the up and up.
Between December 2014 and September 2019 CSX reduce the number of common shares outstanding by 21.6 percent. This is significant. It probably had a positive impact on the price of the outstanding shares, which means every shareholder, not just Mantle Ridge, benefited.
Analysts debate vigorously the long term impact of share buybacks on the price of the stock. If the number of shares is reduce and every other element affecting the price of the stock remains the same, buybacks will cause the price of the remaining shares outstanding to increase. But the other variables, which are difficult to follow, rarely stay the same.
JPS1 Convicted One JPS1 If CSX bought the stock at anything other than market price, the Securities and Exchange Commission would be all over it Let's look at this another way....suppose a glut of available CSX stock is being pushed on the market.....what happens to the price? Paul Hilal held onto a few million shares did he not? What just happend to the value of those shares due to this glut? By pulling 1/3 of the shares Mantle Ridge held back into the CSX treasury, you really don't see how that worked? As noted above, the buyback a portion of Mantle Ridge's shares was immaterial. Prices hardly moved. You can look them up. CSX filed Form SC 13D/A with the SEC. The transaction appears to be on the up and up. Between December 2014 and September 2019 CSX reduce the number of common shares outstanding by 21.6 percent. This is significant. It probably had a positive impact on the price of the outstanding shares, which means every shareholder, not just Mantle Ridge, benefited. Analysts debate vigorously the long term impact of share buybacks on the price of the stock. If the number of shares is reduce and every other element affecting the price of the stock remains the same, buybacks will cause the price of the remaining shares outstanding to increase. But the other variables, which are difficult to follow, rarely stay the same.
As noted above, the buyback a portion of Mantle Ridge's shares was immaterial. Prices hardly moved. You can look them up.
Companies buying back their outstanding shares - for whatever the reason - is the ULTIMATE insider trade.
Even AT&T is not imune ...
https://www.msn.com/en-us/money/companies/atandt-agrees-to-a-deal-with-activist-shareholder-elliott-management/ar-AAJsNtl?ocid=spartanntp
JPS1Between December 2014 and September 2019 CSX reduce the number of common shares outstanding by 21.6 percent.
Makes me wonder if they had that kind of cash just laying around, or if they had to borrow it? (doom music in background)
Convicted One JPS1 Between December 2014 and September 2019 CSX reduce the number of common shares outstanding by 21.6 percent. Makes me wonder if they had that kind of cash just laying around, or if they had to borrow it? (doom music in background)
JPS1 Between December 2014 and September 2019 CSX reduce the number of common shares outstanding by 21.6 percent.
The cash the CSX had was what made it a target for Manle Ridge in the first place. Mantle Ridge's job from the start has been to 'liberate' all cash on hand and able to be developed by scraping or selling 'assets'.
Mantle Ridge (and hedge funds in general) run the company on debt and give the cash to us.
BaltACDrun the company on debt and give the cash to us.
That's what I'm getting at....kinda slick when you think about it. Use your leverage to cause the company to use debt to prop up the stock price (by pulling 1/5 of the common shares back in). Then sell off your holdings and exit, leaving the debt behind.
CSX went through a similar situation some years back with The Children's Fund. That outfit wanted large dividends with lots of borrowing to cover almost every imaginable capital and operating expense. Fortunately, the stock price rose and the fund cashed out before doing any real damage.
CSSHEGEWISCHCSX went through a similar situation some years back with The Children's Fund. That outfit wanted large dividends with lots of borrowing to cover almost every imaginable capital and operating expense. Fortunately, the stock price rose and the fund cashed out before doing any real damage.
The only reason CSX withstood The Childrens Fund was that the Credit Default Swap recession of the 2007-2008 damaged The Childrens Fund other holdings to the extent that they had to sell what they had accumulated in CSX at a real market price to cover the margins that they had in their other holdings. Their house of cards was collapsing.
The Childrens Fund did get their board seats from their attack, however, they had to cash out and relinquish those seats before they could do any damage.
rrnut282Many CSX stockholders should be pondering, "sell or let it ride?" at this point. I know I am struggling with that question.
https://finance.yahoo.com/news/independent-director-steven-halverson-just-101728407.html
Independent director, too. Draw your own conclusions.
- PDN.
Our community is FREE to join. To participate you must either login or register for an account.