Continental AG ADR Ratio Change and Stock Distribution

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Germany-based tire and auto-parts maker Continental AG’s ADR(CTTAY) had a ratio change recently resulting in a 2 for 1 stock split for ADS holders. CTTAY closed at $32.35 on Oct 29 and opened at $16.13 on Oct 30 before ending the day at $16.33. The depository’s announcement on the ratio change is listed below.

The last time Continental implemented a stock split was back in 2013.

Continental – Ratio Change & 100% Stock Distribution
Deutsche Bank Trust Company Americas (“DBTCA”), as Depositary, for the sponsored Depositary Receipt (“DR”) program for Continental AG (“Continental”), is announcing a ratio change on the DR program for Continental.

The ratio will change from five (5) DS representing one (1) ordinary share to the new ratio of ten (10) DS representing one (1) ordinary share.

As a result of the ratio change, Depositary Share (“DS”) holders of Continental will receive a 100% stock distribution (or 1 additional DS for each DS held) as of the DR record date.

Current Ratio: 5 DSs: 1 Ordinary Share 
New Ratio: 10 DSs: 1 Ordinary Share
DR Record Date: October 26, 2018
DR Payable Date: October 29, 2018
First day of trading under the new ratio will be October 30, 2018.

Fractional DS will not be issued. The CUSIP will remain the same. No exchange of the DR certificate(s) is required and any outstanding certificate issued are deemed to conform to the new ratio.

Source: Deutsche Bank 

After peaking at over $60, the stock has fallen by nearly 50% after two consecutive earning warnings.

Disclosure: Long CTTAY

How the US Railroad Industry Became a Monopoly: Chart

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A few years ago I wrote a post about how the US railroad industry has become a monopoly with a neat map. The article was well received and continues to receive interest from readers. The following post is an update to that article.

Of the Class I railroads in the US, the following four are majors:

  1. BNSF Railway
  2. CSX Transportation (CSX)
  3. Norfolk Southern Railway (NSC)
  4. Union Pacific Railroad (UNP)

Out of these, BNSF is private owned by Buffet’s Berkshire Hathaway. The other three are available on the market for investors.

These four major railroads became powerful as a result of many mergers and acquisitions over the past 50 years. The following chart shows the evolution of these railroads:

Click to enlarge

The chart below shows the Network Map for the four US Railroads:

Click to enlarge

Via: The Big Picture

The following is another chart showing the merger wave in the American railroad industry:

Source: RailRoad Signals

All US railroads are excellent for long-term investments. The best way to profit from railroads is simply buy a bunch of stocks and forget about them for years. After 10 or 20 years with dividend reinvested an investor will be rewarded well.

Also see:

Disclosure: Long NSC, CSX, UNP