What Happened?
Shares of infrastructure investment and operations firm FTAI Infrastructure (NASDAQ: FIP) jumped 3.3% in the afternoon session after the company announced an agreement to acquire The Wheeling & Lake Erie Railway Company for $1.05 billion in cash. The acquired company, The Wheeling & Lake Erie Railway, was a Class II regional freight railroad. To finance the purchase and refinance existing debt, FTAI Infrastructure secured commitments for $2.25 billion in total capital. This financing included $1.25 billion in new debt and $1 billion in preferred stock. The company's CEO stated that growing its freight rail platform was a key focus, and the deal added scale and diversification. Investors also learned the company expected the combined freight business to generate approximately $200 million of annual Adjusted EBITDA by the end of 2026.
After the initial pop the shares cooled down to $7.20, up 0.1% from previous close.
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What Is The Market Telling Us
FTAI Infrastructure’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 3.2% on the news that the stock gained ground amid broader positive market sentiment ahead of a busy week for corporate earnings. Notably, the earnings season got off to a strong start: More than 85% of the S&P 500 stocks that reported earnings exceeded expectations, according to FactSet data. This robust performance fueled positive sentiment, suggesting that corporate profitability remained resilient despite ongoing economic uncertainties.
FTAI Infrastructure is down 1.2% since the beginning of the year, and at $7.20 per share, it is trading 27.6% below its 52-week high of $9.94 from August 2024. Investors who bought $1,000 worth of FTAI Infrastructure’s shares at the IPO in July 2022 would now be looking at an investment worth $2,398.
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