Re: Trains Magazine
Author: FUD
Date: 08-07-2019 - 16:14
david vartanoff Wrote:
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> ... Some people believe RRs were built to
> move people and goods, others believe they merely
> exist as a dividend/rising stock price machine.
Those who think of railroads as a transportation device believe the former. Those who provide the capital a railroad needs to run believe the latter. The intersection of those two sets has very few members.
As a corporation, the purpose of a railroad is to gather payment from customers for some kind of service (as little service as possible for as much money as possible), at the lowest cost possible; to pay dividends and high executive salaries; and over the long term (generally no longer than a couple of years, and often much less) to provide stock price appreciation for investors. Investors, for the most part, couldn't care less whether the corporation provides railroad service or sells lemonade - as long as it produces growing returns on investment for as long as they want to maintain their investment, the source of funds doesn't really matter. And once an investor decides that they've milked it for all that it's worth to them and sells to some other mark they don't care any more.