"Mantle Ridge LP, the investment vehicle of Paul Hilal, has sold off nearly all of its $1 billion position in CSX, the newspaper reported based on filings with the U.S. Securities and Exchange Commission. CSX bought back about 4.7 million shares."
https://www.progressiverailroading.com/csx_transportation/news/Mantle-Ridge-sells-most-of-its-stake-in-CSX--58888
Why is Mantle Ridge selling?
Typical vulture capital investor. Take the money & run. Pick the carcas clean and sneak out under the cloak of darkness when the victim dies so you are not associated with it's demise. Find new victim.
The 60% operating ratio is a charade and won't be sustained.(CSX's future was sold to satisfy a present day vulture Gordon Gecko)
Saw it coming the day they bought in! Sell everything, hoover the proceeds to Mantle Ridge.
Never too old to have a happy childhood!
Out of all the "traditional" stockholders who owned CSX stock prior to the Mantle Ridge involvement, I wonder how many of them chose to cash-in versus holding on to the stock to see what lies across the abyss?
Victrola1 Why is Mantle Ridge selling?
Probably because they have achieved their investment objective. But only they can say for sure.
JPS1Between January 2, 2015 and October 21, 2019, the market value of CSX’s common shares increased 69.75 percent. Mantle Ridge realized a good return on its investment. So too did anyone invested directly or indirectly in the aforementioned investment vehicles.
Mantle Ridge did not get EHH installed until March 1, 2017 - Jan. 1 2015 to Feb. 28 2017 was on Michael Ward's watch.
BaltACD Between January 2, 2015 and October 21, 2019, the market value of CSX’s common shares increased 69.75 percent. Mantle Ridge realized a good return on its investment. So too did anyone invested directly or indirectly in the aforementioned investment vehicles. Mantle Ridge did not get EHH installed until March 1, 2017 - Jan. 1 2015 to Feb. 28 2017 was on Michael Ward's watch.
That was not my primary point.
Mantle Ridge's was not the only investor in CSX that did well. Some of the posters on Train's forums seem to think that Mantle Ridge ripped off CSX to the detriment of the other shareholders and then ran. That is not what the numbers show.
During the period Mantle Ridge was a minority shareholder, the stock price increased approximately 43 percent. A good return! For every investor!
JPS1 BaltACD Between January 2, 2015 and October 21, 2019, the market value of CSX’s common shares increased 69.75 percent. Mantle Ridge realized a good return on its investment. So too did anyone invested directly or indirectly in the aforementioned investment vehicles. Mantle Ridge did not get EHH installed until March 1, 2017 - Jan. 1 2015 to Feb. 28 2017 was on Michael Ward's watch. That was not my primary point. Mantle Ridge's was not the only investor in CSX that did well. Some of the posters on Train's forums seem to think that Mantle Ridge ripped off CSX to the detriment of the other shareholders and then ran. That is not what the numbers show. During the period Mantle Ridge was a minority shareholder, the stock price increased approximately 43 percent. A good return! For every investor!
Right on.. my CSX shares went up too..
Primary point or not - Mantle Ridge was the announced vulture capitalist investor - 'gaining contro' with less than 5% of the shares.
Investors were not "ripped off." But what about some employees, some passengers on the Silver Comet, and some customers?
Short-term speculators may have obtained a nice return on their stock, but what happens in the long term when a capital-intensive business is denied the required capital to grow the business?
CSSHEGEWISCHShort-term speculators may have obtained a nice return on their stock, but what happens in the long term when a capital-intensive business is denied the required capital to grow the business?
Who cares? "I" got my money...
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...
Activist investors can provide a huge benefit to a business although whether Mantle Ridge in particular was a positive benefit to CSX remains debatable. Imagine the alternative: Most investors are passive and care so little they don't vote or even read the reports... they effectively allow management to do whatever they want. Personally I'd prefer someone with a large block of shares who takes an active interest in the business.
And 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.
CSSHEGEWISCHwhat happens in the long term when a capital-intensive business is denied the required capital to grow the business?
There's an old adage: "The men who manage men manage the men who manage things ... and the men who manage money manage the men who manage men."
So long as that priority is true, expect people like Paul Hilal to have enthusiasm for railroads but not the railroad business... and the tyranny of three-month predictions to continue to ruin practical operations.
tree68Who cares? "I" got my money...
I'm thinking that Mantle Ridge chose to exit when they did in anticipation that the political climate is about to change in ways that are not kind to energy intensive businesses. With the oil producing countries at each others throats, the middle east could soon become a crucible.
daveklepper Investors were not "ripped off." But what about some employees, some passengers on the Silver Comet, and some customers?
What is the Silver Comet?
An "expensive model collector"
An Amtrak train. On onr run, it plowed into a freight on a siding because of a failure of a freight crew member to realign a switch, although he thought he had done so.
The automatic block signal that would have alerted the engineer with more than sufficient stopping distancer was disabled a week earlier to make installation of PTS easier.
I brlieve that prior to HH's arrival (One thing he did (which I assume has since been reversed) was remove the three-step safety requirements before doing work under or between locomotives and cars and other locomotives and cars on any train.) the traditional safety culture would have meant either the ATS system would somehow have continued operable up to the hour that the PTS system was made operable, or additional safety measures, even a slow order if necessary, would have prevented the accident. His removable of the traditional three-step process indicates to me that he never really understood how a safety culture should be maintained. I am not saying he did not put "Safety First." I am saying he did not fully understand how to fully implement that priority. And I am not saying that I do either. But I do thing Ward did. Like Ice, Krebs, Barriger, even Pearlman. I did know how to put Safety First when acting as Dispatcher at Shore Line Trolley, specific for that operation.
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'.
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
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
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.
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.
Did Mantle Ridge sell out for a quick profit, or did Mantle Ridge jump to avoid being part of a train wreck?
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...
Many CSX stockholders should be pondering, "sell or let it ride?" at this point. I know I am struggling with that question.
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.
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.
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.
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 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."
rrnut282Many 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.
rrnut282 Many CSX stockholders should be pondering, "sell or let it ride?" at this point. I know I am struggling with that question.
Our community is FREE to join. To participate you must either login or register for an account.