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Thread: XTRN the Las Vegas Railway Express closed Friday at 10-cents a share

  1. #1
    This stock's price has been all over the map from a low of 6-cents a share to about 45-cents a share during its most optimistic days, then about 21 cents a share a few weeks ago before some big announcements about getting clearance to use Union Pacific's tracks... and now the stock is back down to 10-cents a share which is where it was a year ago.

    Hurting investor confidence? Perhaps that service won't start till the end of 2013. That's a long time to wait -- in this Internet-fast world -- for revenue to start coming in.

    But at a dime a share how much of a gamble would it be?

  2. #2
    Tuesday morning... the stock is down to 8-cents a share. If you look at the one-year chart of XTRN it looks like a classic bubble.

  3. #3
    After the close of the market today, Tuesday, Las Vegas Railway Express put out a press release that included an article in the Las Vegas Review Journal that quoted Michael Barron, Chairman, saying that service would not begin until January of 2014. This means they will miss the holiday rush and one of the busiest times for travel to Vegas from Southern California. January is typically a slower month for Vegas travel so don't expect any big passenger occupancy reports during the first few weeks... but that might be what the XTRN wants to get the bugs out of a new service.

    The company's press release also includes information about a new fundraising effort. It seems that the company needs to raise $100 million to launch the train service and $56 million will go to Union Pacific to upgrade the rails.

    No wonder the stock dropped 20% today to close at 8 cents a share. This type of new could be raising red flags all over the investment community -- not only the delay in service, but also the need to raise $100 million with half of it going to Union Pacific. You've got to wonder if Union Pacific signed its recent deal with LVRE to get money to fix up its tracks? And I always thought the whole idea of the X Train was to use existing tracks? Exactly what will $56 million going to Union Pacific be used for?

  4. #4
    Wednesday's close was at 7-cents a share. 6-cents marks the low of about a year ago... before all the positive news started coming out.

    Let's review the facts:

    1. Service won't start till perhaps January of 2014
    2. Company must raise $100-million and pay $56-million to use the rails of Union Pacific. Does this mean more money will have to be paid to Burlington Northern?
    3. Train station in Vegas still needs to be renovated
    4. Train cars still need to be refurbished
    5. Stock has fallen from its all time high of about 45-cents a share

    So what does it all mean?

    I am sure the fundraising of $100-millon is a big surprise, but when the money is in the bank, this will be a non issue. In the meantime... the speculative money has bolted. That doesn't mean there is a problem, it just means that the speculators who were hoping to make a quick buck will move their speculative dollars elsewhere. We know this is a good project. We know this will take off and succeed. Unfortunately, stock prices don't necessarily follow common sense or intelligence and are ruled by emotion. As the actual start date approaches the stock will rise again. That's the way these things go.
    Last edited by Alan Mendelson; 12-05-2012 at 11:42 PM.

  5. #5
    XTRN stock finished today, December 7th, back at 10-cents a share. In another media interview, chairman Michael Barron said there would be "test runs" in October of 2013, a run for New Year's Eve, and the target date for regular service will be January 4, 2014.

    Doing some figuring: if they need to raise $100-million+ to get going, and they have a profit margin of $10 per passenger, it will take ten million passengers to recover the start up costs. The train is supposed to carry 600 passengers per trip at $99 per passenger for the basic ticket plus added revenue from travel commissions, extra beverages sold, perhaps extra food.

    So, with a $10 profit margin per passenger it will take about 16,666 trips to generate the profits to cover the start up costs.

    They plan ten trips per week. And at ten trips per week, it will take 1,666 weeks... or 32 years.... to recover the $100million + start up.

  6. #6
    Alan, I would like to say thanks for providing this information.

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