Looks like Ancora is getting their wish. They’ve forced out the guy who righted the ship after all the bull from Foote and Harrison but Hinrichs biggest failure was not increasing the share price.
Hinrichs did the heavy lifting to get CSX back on a stable footing and gets punished for it.
“No good deed goes unpunished.”
“A prophet without honor in his hometown.”
[a bit off, but in the ballpark]
Who really is “Ancora”? BlackRock in disguise?
Jim Cramer, host of Mad Money on CNBC, who himself used to be a hedge fund manager, was not happy with the ouster. When I first opened the site, I didn’t have time to read it, and when I went back, they want you to sign up, which I am not willing to do.
How much of a stake is Ancora Holdings controlling?
Balt Ancora holds less than 2 million shares of all the stock at CSX. That’s less tha .2 percent of all the stock for the company yet they were able to force out a CEO. The biggest share holders are retirement funds like vanguard.
How does 2% lead the other 98% around like a dog with a nose ring?
You don’t have to own controlling interest to get your way. You have to convince enough shareholders who together own controlling interest to see things your way. Jim Vena was brought back to UP the same way. Many business decisions regarding direction of the company seem to come from small, but very vocal, shareholder(s). Sometimes these vocal groups have just started buying into a company.
Only a guess, but maybe Ancora (and Soroban Capital who had Vena brought back) are tapping into an underlying unhappiness with the way a company is being run. The new agitators are a catalyst to form a coalition of all unhappy shareholders.
Ancora just seems to have done it faster than others.
Jeff
Testicular fortitude and a lack thereof on one side.
To get approval for the merger with NS Vena reportedly suggested deploying the National Guard to Memphis, St. Louis, and Chicago.
The lack thereof seems to be an epidemic these days.
I think you misread…it wasnt 2% of stock holdings but .2%. I didnt check the holdings but did see the period (.2) before the 2.
Wow, what a lousy hand he was dealt (and cleaned up). Massive flooding in Carolina wiped out the Clinchfield and the Howard Street tunnel. Reroutes all over the system, for months.
The shelf life for CEOs is pretty short these days. Dont blame them for making what they can.
Ed
“Won’t somebody please think of the operating ratio???!!”
I’ve read rhat some, not necessarily CSX stock holders, have questioned the rebuilding of the Clinchfield. The Howard Street tunnel project was opposed in the past.
Hinrichs seemed to be focused on the long term growth and health of the company. I believe CSX has been the only class one to register growth past precovid levels. Unfortunately doing all that meant spending money. Some shareholders don’t like spending money, unless it’s for stock repurchases.
He wasn’t worrying about the operating ratio or the stock price short term. Unfortunately there are many who only think about those two things.
An ironic twist is the SMART-TD (train and switchmen) leadership reaction to the change. Their release basically says good riddance to him. Most reactions I’ve seen on social media from the rank and file seem to be one of sorry to see him go. I predict that the differences they had with Hinrichs will be trivial compared to the next CEO.
Jeff
So, what next? The “money now!” folk want CSX to pursue a merger. Okay. That would be BNSF. CPKC and CN make no sense.
So, if BNSF says “no”, then what? Really think UP would abandon NS at this point?
Best case at this point, BH buys CSX outright. But BNSF holds all the cards.
At least a BH held BNSF and CSX would return a bit of sanity to the industry…
It seems like it’s happening everywhere today. Freedom is easily lost.
As long as CSX writes a big enough check Buffet will say yes. But Warren ain’t writing any check.