Why Kansas City Southern Stock Dropped Today
The Biden administration is reportedly displeased with the level of consolidation in the railroad sector, and that's weighing on the railroad stock, which is currently the target of a $33 billion acquisition. Shares of Kansas City Southern (NYSE: KSU) fell as much as 8.7% on Thursday as investors try to figure out the odds of the railroad's planned sale winning approval from regulators.
Railroads have a lousy history when it comes to consolidation. So bad, in fact, that the U.S. Surface Transportation Board (STB) in 2000 imposed a moratorium on major deals. But Kansas City Southern, as the smallest of the major North American railroads, has always been seen as the possible exception, and earlier this year the company was the subject of a bidding war between Canadian National (NYSE: CNI) and Canadian Pacific (NYSE: CP).
Image source: Kansas City Southern.
Source Fool.com
