On Tuesday, the S&P 500 and Toronto were each down about 0.1%.
CN Rail was a big story with a 7.4% gain. That’s a lot when we are talking about a $100 billion in market value.
Initially the stock was up on news that a large investor had a 5% position and wanted a board seat.
Then the Surface Transportation Board released a ruling that CN would not get the voting trust treatment that it asked for in regards to its hoped-for takeover of Kansas City Southern. A headline said that was a blow to CN. But wait, the stock rose on the news. That surprised me given if the deal does not go though CN will have spent about a billion dollars in payments to CP and to Kansas City and have nothing to show for it. But perhaps the market thinks that wasting the $1 billion is better than over-spending on a $30 billion acquisition. Seeing the stock up rather than down on the apparent bad news from the regulator I decided to sell my shares, take my gain and move on.
Then, after the close the major shareholder with the 5% position blasted CN and called for the ouster of its CEO and of tis chair. They want nothing to do with the acquisition of Kansas Southern. All very strange. I suppose that by tomorrow, the analyst will have a better explanation of why the stock rose on the news.