Me, me, me, me, me, me! Uhm....me, me, me, me, me, me me
I am not admitting to being a fat lady, but I am warming up. This one is toast - there is no long term. The strategy is flawed. The rest of the industry is not stupid. The ability to just buy any revenues at any price and toss them all together in a big pot, which will suddenly turing into operating leverage and profits is not real. Jacobs will win, he's prtected himself. The investors will lose, at least those that drank the kool-aide.
Just look at his run rate of overhead and compare it to his margin and stated goal of adding 400 or so new people. Ask yourself this question. At a 10% average margin in the freight brokerage industry, what's XPO's top-line run rate have to be by the end of the year, to breakeven? Now go back and read the past releases. Jacobs is not claiming to be at that rate - is he? My own calculations put his burn rate for overhead in the $1.5 billion revenues range. The model is flawed, because we've all bought into the growth story, believing the profits will fall in line later........... In the words of some, "not gonna doer".
There is still money to be made. Jacobs is a wall street insider and has a significant amount of credit. The stock will pop up and down, until the final collapse. Place your bets on the volitility, not on some mythical equilibrium point where suddenly XPO becomes the next CHRW.
Uhm, Me, me, me, me, me, me.
I agree with Petah's Long Term Sentiments - there simply isn't a long term.........
Me, me, me, me, me, me! I'm warming up for the sad tune. Jacobs knowledge of and abilities within transportation are a JOKE! When this one melts,I hope there are recovery options for shareholders who've been scammed.
However, he's a really good wallstreet spin doctor - I have to admit that.
agree, been saying this same thing since BJ hatched his masterplan. No value will be created by his plan. Only way to get new business (and he has proved that) is by slashing already depressed pricing. When he is forced to raise prices to a profitable level on the revenue he has obtained shippers will flock to the next company who is willing to slash prices. This has been the way this industry has worked for many years and it will continue to do the same. I do agree that technology, XPO is investing heavily in this, will help create more margin in the future but the outrageous company overhead will wash away all those advantages.