CP has a 50% chance of Bankruptcy

I have been shown relatively disturbing information on this website regarding the current status of Canadian Pacific, with the company having a 50% chance of bankruptcy. Even though I believe that this is due to Canadian National being the preferred partner of Kansas City Southern (as of when this was posted) and with CP's stock dropping 78% in one day upon this announcement, I have also been informed that this was due to real estate, lines, locomotives and rolling stock being sold quickly. Do any of you think CP might file and/or be bought by another railroad? (Likely not CN since that would be anticompetitive) The floor is open for discussion.

About a year ago a friend showed me a simular site that said NS had a 78% chance of bankruptcy. Comparing that with NS's quarterly reports, other financial information I found online, and my own obersvations , I concluded the site was bogus. I suspect the same with this.

Even if CN gets KCS, I would not expect CP to declare bankruptcy. While CN-KCS would be a severe blow to CP (enough that CP would be under pressure to find a merger partner), I don't expect it would a big enough blow to knock the railroad into chapter 77 (or the Canadian equivalent).

The guys making the prediction probably rely on Altman Z scores, which don't work when you look at transportation companies.

In general, Alt-Z is only right about 70% of the time. With transportation companies, it's closer to 30% accurate.l

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This site has been around for years… it’s a barometer as mentioned based on the Altman Z score. MBAs teach it, supposed to be a tool to gauge health of companies relative to investing…. I think at one point they had Apple or Google at like 80% or more… so yeah

Shortline614 wrote: ↑Fri Aug 20, 2021 1:48 pm About a year ago a friend showed me a simular site that said NS had a 78% chance of bankruptcy. Comparing that with NS's quarterly reports, other financial information I found online, and my own obersvations , I concluded the site was bogus. I suspect the same with this.

Even if CN gets KCS, I would not expect CP to declare bankruptcy. While CN-KCS would be a severe blow to CP (enough that CP would be under pressure to find a merger partner), I don't expect it would a big enough blow to knock the railroad into chapter 77 (or the Canadian equivalent).

I generally agree, hunch mind you, I haven't been running the numbers or anything. CP has been well run on the accounting / finance side since EHH and has had some small wins such as buying some of their old line to St. John, NB back. Don't think they will be near bankruptcy in the next few years.

If CN's acquisition of KCS is successful, it does put a huge crimp on CP's growth potential, esp. long term. So long term they could have some trouble. CN seems to have bought up most of the easy win adjacent class II and III railroads.

CP has growth potential, but it might need to find a JV partner or merge with someone else. I've suggested elsewhere that CP and UP would make for a far better competitor to CN and BNSF than they do alone.

Agreed UP - CP combo would be the best fit, except for redundant trackage in the upper midwest and Missouri.

Would it be a Precision Bankruptcy? (ducking)