On Tuesday the S&P 500 was down 0.3% and Toronto was down 0.1%.
There were no particularly big moves in the stocks on our list.
The CN Rail saga is rather perplexing. Last week they got the ostensibly BAD news that the regulator was not going to allow a “voting trust” that they hoped to have in order to expedite their hoped for purchase of Kansas City Southern. And I believe the comments in that decision were not favorable to the idea of the acquisition. On that “bad” news the stock rose and over a few days rose 17% from about $138 to as high as $161 before slipping back to $155.50
CP Rail which now has a better chance of “winning” the competition to buy Kansas City Southern initially fell from $91 to $86 but then rose to $93 before slipping back to $90.
Given that CN’s price rose on the “bad” news about the deal it seems that the market believes that CN will ultimately not buy Kansas City Southern AND that his is quite a good thing in spite of the money spent to date and a break-fee of some $1 billion dollars.
But CN has indicated they still plan to pursue the deal saying it is in the public interest.
Meanwhile a major share owner TCI Fund (they own about 5% of CN) came out with very strong criticism of CN over this deal and over management in general. They are demanding the CEO be fired and Board replaced. I find their criticisms and threats to be a bit much. Who do they think they are? It’s true that CN’s earnings fell in 2020. Its revenues were down presumably largely due to the pandemic. But CN has had a stellar record since it was privatized in 1995. A 5% share holding simply does not guarantee even one Board seat let alone give TCI the power to elect a whole new board. I suspect TCI is over-playing their hand and making a lot of noise that will not go anyplace. Time will tell.
I find all of this rather perplexing. I sold my CN shares too early when the shares popped on the news last week. A more prudent action would have been to sell half and wait to see how things settle out.