XPO | Sic Sold

So he sold terminals and...so what?

It means exactly...zero. Well, it means that Doug Stotlar and previous weren't as financially sharp.

Why not sell terminals and lease them? Unless you guys have degrees in accounting and can speak competently to how large enterprises manage capital verses expense, how old assets valued at purchase price affect the bottom line verses realizing the true value in a sale, how XPO has consistently valued op ex over cap ex and why...I'm very skeptical about all the doom and gloom. FYI this has been done all over the place in XPO because the company doesn't want to be a land owner - not its competency.

Other parts of the business run exclusively on leased and rented facilities because of the flexibility. LTL had overwhelmingly company-owned real estate. LTL is the oldest business unit. LTL is modernizing.

In 2008, YRCW owned a facility in Colorado Springs for over 50 years and another that was a Roadway terminal for 25+. They sold both and leased back the 50 year one and are now paying rent on that to this day. They did the exact same thing in Denver. Paid for property sold and leased back. You don't need a accounting degree to figure out that they had to do that to stay afloat, not because of "flexibility" or some other such nonsense.
Guess who were the buyers on most of that system wide? R+L and Estes.
 
In 2008, YRCW owned a facility in Colorado Springs for over 50 years and another that was a Roadway terminal for 25+. They sold both and leased back the 50 year one and are now paying rent on that to this day. They did the exact same thing in Denver. Paid for property sold and leased back. You don't need a accounting degree to figure out that they had to do that to stay afloat, not because of "flexibility" or some other such nonsense.
Guess who were the buyers on most of that system wide? R+L and Estes.
They can afford to buy because they don’t ay their drivers appropriately.
 
It worked for a day. The stock shot up over seven dollars. And then Wall street read up on everything. And nope. Back in line where you were.

Company is drowning in debt. Unable to grow because the only way he knows is to buy and he can't buy anything because he's out of money.


This is one of your most insightful post.

Wall Street amazes me how it falls for these type of schemes. It worked for him in the past but something is wrong this time.
Maybe Spruce Point Capital had it right.


VyP7Kka.jpg
 
They can afford to buy because they don’t ay their drivers appropriately.

You may want do some research before you make that statement. ESTES road drivers make .72 per mile and city is over $30 per hour, according to where you are goes up from there. Don’t see union doing that well. Also look at Home Depot. ESTES owns lots of their properties and leases it to them. The Home Depot delivery trucks all have operated by ESTES express on the doors. Keep on selling your properties and they keep buying and renting back to you. Helping to keep pay up.
 
You may want do some research before you make that statement. ESTES road drivers make .72 per mile and city is over $30 per hour, according to where you are goes up from there. Don’t see union doing that well. Also look at Home Depot. ESTES owns lots of their properties and leases it to them. The Home Depot delivery trucks all have operated by ESTES express on the doors. Keep on selling your properties and they keep buying and renting back to you. Helping to keep pay up.
That may be but when do they get O/T ?
 
This is one of your most insightful post.

Wall Street amazes me how it falls for these type of schemes. It worked for him in the past but something is wrong this time.
Maybe Spruce Point Capital had it right.


VyP7Kka.jpg


Tough to put a finger on it. But there are red flags everywhere. So, we got that going for us.
 
So I guess there is no evidence that a Jacobs-owned entity is buying terminals and leasing them back to XPO.


Looks like this is correct. He sold them to any one and everyone. Whoever had the money.

What we can’t figure out. And what has been asked several times. At least around here. Is if he sells off the rest of XPO and has just the LTL. And he sold off all the terminals. And in 5 years the fleet will be obsolete. Due to the economic advantages of electric tractors. He don’t own the customers. Or their freight. All he has is some trailers and a few drivers. Because we keep losing drivers. Through various means. What is that worth ? How is he going to sell that ? To anyone ? A few drivers don’t make much of a business. What is the future ? Is there a future ? Even the investors were confused.
 
Looks like this is correct. He sold them to any one and everyone. Whoever had the money.

What we can’t figure out. And what has been asked several times. At least around here. Is if he sells off the rest of XPO and has just the LTL. And he sold off all the terminals. And in 5 years the fleet will be obsolete. Due to the economic advantages of electric tractors. He don’t own the customers. Or their freight. All he has is some trailers and a few drivers. Because we keep losing drivers. Through various means. What is that worth ? How is he going to sell that ? To anyone ? A few drivers don’t make much of a business. What is the future ? Is there a future ? Even the investors were confused.
Lots of ltl and other companies lease their building, FedEx is one of them. I highly doubt electric trucks will make diesel obsolete in 5 years. Bradley isn't doing anything that other ltl have or are doing
 
Lots of ltl and other companies lease their building, FedEx is one of them. I highly doubt electric trucks will make diesel obsolete in 5 years. Bradley isn't doing anything that other ltl have or are doing
One huge thing Jacobs is not doing is investing in equipment ! Our lift gates are so , so outdated . Tractors have high , high miles with many issues . Still running old junk Sterlings that look like sh*t , customers asking why are you running junk that looks like that ? Rusty wheels , broken Faron’s . This is the image you want our customers to see ? This is how we attract good drivers ? XPO is becoming a joke ! I do not see any other LTL in my area running junk like we have . Trailers are newer , liftgates are all new , most tractors are newer and look decent in customers eyes .
 
If terminals are being sold and leased back does that mean Xpo is strapped for cash?
It could mean the company is strapped for cash, but I don't think that's the reason. In the video that Bradley made, he talked a about liquidity. And although he says he is only interested in selling or spinning off everything except North American LTL, I think he's positioning himself to do exactly what he's claiming he won't do....sell us off. Getting rid of the buildings makes it easier to sell the business that occupies them. Think about it, some of the terminals in our network are pretty run down and would not be very appealing to a prospective buyer, if he dumps the buildings, he can focus on just selling the business. Just my opinion, I'm just a dumb truck driver what do I know, right?
 
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