Thursday, November 08, 2007

Half Nerdy Thursday: Installment V

This posting deals with the arcane subject of railroad equity sales. It was inspired by an entry in my Sitemeter log that showed someone in or around the City of Brotherly Love was Googling the keywords:

I have to say this is one of the more unusual referrals for this site. I get lots of hits from people googling various forms of sexual, porn, and masturbation addiction. But railroad keywords are a rarity.

While I'm not a licensed securities dealer, I think it is safe to say that the answer to our reader's question is an unequivocal "no". The answer is based on an SEC Form 8-K filed on May 23, 1997 by CSX Corporation, one of the two companies that wound up purchasing Conrail and then dividing its assets. Quoting from that report:
On May 23, 1997, the joint tender offer (the "Joint Tender Offer") of CSX Corporation (the "Company") and Norfolk Southern Corporation ("NSC") expired. The Joint Tender Offer was made pursuant to an agreement between the Company and NSC dated as of April 8, 1997 (the "CSX/NSC Agreement"). It was effected through Green Acquisition Corp. ("Green", a subsidiary jointly owned by the Company and NSC) for the outstanding shares of Conrail Inc. ("Conrail") not already owned by Green, the Company and NSC. Most of such outstanding shares were acquired in the Joint Tender Offer...

On June 2, 1997, a subsidiary company wholly-owned by Green merged with and into Conrail. In the merger, all Conrail shares not already owned by Green, the Company and NSC were converted into the right to receive $115 cash per share and the remaining Conrail shares were cancelled.

That means the spouse should have collected $115/share on that stock over ten years ago. Whatever Conrail stock certificates this person may have been found are worthless on the equity markets. They may have a scripophilic value, but it is unlikely that they're worth that much right now. At the time I was composing this post, no Conrail certificates were listed on eBay.
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