Wednesday, June 25, 2008

TCI's activist Web site

CSX shareholders vote today on a slate of directors nominated by The Children's Investment Fund and 3G Capital Partners. The CSX-TCI battle is a marathon, not a sprint, though, and CSX says that it could take weeks to certify the election. Despite everything that CSX has thrown at it, the TCI freight train cannot be slowed. First, CSX sued TCI over disclosure requirements and the use of swaps to amass its position. That case resulted in a draw. Next, CSX played the jingoist card and enlisted Lou Dobbs to say that an asset crtitical to national security was in danger of falling into foreign hands. TCI is based in London. The red coats are coming!

That's the old media stuff. The new media stuff and what catches this blog's attention is TCI's activist Web site, "Moving Toward a Stronger CSX." The site explains TCI's view of the value of CSX and offers several documents related to its engagement with CSX. A white paper on the site details governance and perfomance issues at CSX that TCI wants to see improved. It also gives investors instructions on how to vote their shares and gives them the ability to vote by phone, mail, and Internet.

The site is a great resource for investors, institutional managers, other hedge funds and the media. Activist Web sites will become another arrow in activists' quiver as the industry catches on.

People are buying into TCI's argument. Hedge funds hold at least a third of CSX shares and the stock is up 42% this year, outperforming the Dow Jones Wilshire Rail Index, which is up 24%. Imagine, if TCI did a YouTube video? Just kidding...kind of.

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