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.
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.
Never too old to have a happy childhood!
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.
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.
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.
Makes me wonder if they had that kind of cash just laying around, or if they had to borrow it? (doom music in background)
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.
JPS1Between December 2014 and September 2019 CSX reduce the number of common shares outstanding by 21.6 percent.
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
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.
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?
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.
Companies buying back their outstanding shares - for whatever the reason - is the ULTIMATE insider trade.
As noted above, the buyback a portion of Mantle Ridge's shares was immaterial. Prices hardly moved.
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?
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.
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
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 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.
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.
rrnut282 Many CSX stockholders should be pondering, "sell or let it ride?" at this point. I know I am struggling with that question.
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.
daveklepper You can disagree all you want. The normal practise on the Boston and Maine when I was for a short period an active railroader was that a signal suspension resulted in a lowering of maximum track speed to that permitted in "Dark Territory," which was considerably lower than signalled terrirtory." This affected oassenger trains more than freight.
You can disagree all you want. The normal practise on the Boston and Maine when I was for a short period an active railroader was that a signal suspension resulted in a lowering of maximum track speed to that permitted in "Dark Territory," which was considerably lower than signalled terrirtory." This affected oassenger trains more than freight.
That is the law, and was done in Cayce.
https://en.wikipedia.org/wiki/Rail_speed_limits_in_the_United_States#Signal_speeds
"Federal regulators limit the speed of trains with respect to the signaling method used.[1] Passenger trains are limited to 59 mph and freight trains to 49 mph on track without block signal systems."
An "expensive model collector"
daveklepperYou can disagree all you want. The normal practice on the Boston and Maine when I was for a short period an active railroader was that a signal suspension resulted in a lowering of maximum track speed to that permitted in "Dark Territory," which was considerably lower than signalled territory.
If I remember correctly, this was precisely how operations were being conducted on the section in question: we had some discussion about exactly how CSX interpreted 'dark territory' and how some of those details were changed when EHH started to work his magic.
One very important principal difference was that the CSX requirements didn't involve the part of 'restricted speed' that includes stopping in half the distance to a mistakenly-aligned switch. You will remember that Joe's New Haven explicitly included this, as I recall either for dark territory or for signal failures.
The Amtrak train at Cayce was permitted only 59mph, as I recall, and had to be authorized to 'own the railroad' in order to reach that speed. Problem was, it was authorized to own the railroad, but there were buffoons involved. We had discussions up, down, and sideways about "safety" vs. the need to get traffic even a little expediently over the road in the affected sections ... which wouldn't have happened if true restricted speed had been imposed.
If I recall correctly, CSX dark-territory rules before the advent of EHH didn't require restriction to stop before each facing-point switch, so it might be misguided to pin Cayce on him.
daveklepper But there should have been more protection against human error once a safety system that worked beautifully for years is disabled. And that was HH's responsibility.
But there should have been more protection against human error once a safety system that worked beautifully for years is disabled. And that was HH's responsibility.
I disagree. It was a signal suspension, something that is not unheard of. People are expected to do their jobs properly. It is also hard to place responsibility on someone who had been dead for 2 months when the accident happened.
Many CSX stockholders should be pondering, "sell or let it ride?" at this point. I know I am struggling with that question.
UlrichAnd Mantle Ridge got their money from other people who bought their shares.. not from CSX.. CSX didn't lose anything when Mantle Ridge bought low and sold high.
Whether CSX lost anything remains to be seen. If previous EHH victims are any indication, a number of "his" actions will be reversed. Some already have been.
IMHO, the "activist" investor wants his gains now. Folks who are investing for the future (ie, retirement funds) want long-term growth so they can enjoy the rewards down the road.
If CSX stocks remain high, great. If not...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Did Mantle Ridge sell out for a quick profit, or did Mantle Ridge jump to avoid being part of a train wreck?
Dislexia and age struck again. Of course I should have known and remembered. I rode all three of the Seaboard's "Silver" trains, beginning way before Amtrak, but the Silver Comet only once, the Meteor and Star several times.
Dave, the Amtrak train that was diverted in South Carolina was the Silver Star. The only Silver Comet that I know of was a Seaboard train that ran from New York to Birmingham, and was discontinued some time before Amtrak began operating.
Johnny
Overmodand hiring ... and vetting. I'm effectively a layman and even I know you never leave a facing-point switch open to live rail. (Whether or not you think to yourself 'the signal system will catch it if I forget' or whatever...)
Almost like those people are humans, and probably humans being treated like crap with horrible schedules that can make a mistake.
Not excusing them, but also not treating them like the devil incarnate.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
I wouldn't equate EHH's termination of formal three-step (we still, to my knowledge, didn't find what it was replaced with for the critical job of 'securing' equipment being worked on from moving) with incorrect observation of switch discipline ... which is the specific 'smoking gun' that would exist for the Cayce accident.
I don't think any 'safety culture' that produced those two effectively knotheaded CSX guys was anything originating with EHH. That was a comedy of errors that might well be traceable back to their training ... and hiring ... and vetting. I'm effectively a layman and even I know you never leave a facing-point switch open to live rail. (Whether or not you think to yourself 'the signal system will catch it if I forget' or whatever...)
Especially if SOP is not to run, as Joe and the New Haven did by default, at speed restricted enough to stop short of any given facing-point switch under conditions of 'no warning'.
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