CSX cancels Investor Day; share price drops

CSX management has cancelled its Oct. 30 Investor Day the event with little explanation. “We have received many incoming calls and emails from concerned investors who are worried what else could be behind management changes and/or the event’s cancellation,” said Cowen and Company Managing Director and Railway AgeWall Street Contributing Editor Jason Seidl.

Investor Day cancellation came on the same day, Oct. 25, as CSX’s announcement that three top executives would be leaving the company in mid-November—Chief Marketing Officer Frederick Eliasson, Chief Operating Office Cindy Sanborn, and General Counsel Ellen Fitzsimmons. At close of business, CSX shares had dropped 2.60%, to $52.92. In after-hours trading, the decline increased to 3.82%, to $50.92.

“There was no specific reason given for the Investor Day cancellation, but one would have to imagine the sudden departure of CSX’s CMO, COO and General Counsel are primary factors,” noted Seidl. “Given feedback we received after the closing bell, we think investors suspect there could be something else behind this. We do not think the departure of these three people, long-tenured executives at the firm, came on completely amicable terms. We think their departure could further disenfranchise additional employees, many of which may blame current management for their departures. This would be something the railroad does not need as it attempts to improve its well-publicized service issues. We expect CSX shares to underperform those of its peers in the near-term or until an explanation is given that can assuage investors anxieties.”