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    The rise and fall of railtrack plc: an event study

    Glass, Anthony (2008) The rise and fall of railtrack plc: an event study. UNSPECIFIED. Manchester Metropolitan University.


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    Forming Railtrack was a key part of the privatisation of British Rail (BR). Railtrack took over ownership of BR's fixed infrastructure in April 1994 and its parent company, the Railtrack Group, was floated in May 1996 on the London Stock Exchange. Despite the group posting some excellent financial results in the early years, Railtrack's record on infrastructure improvement and safety was frequently criticised. This apparent inconsistency between shareholder interests and public service obligations culminated in Railtrack being placed in administration in October 2001. In view of this apparent inconsistency the reaction of the stock market to 19 key events in modelled. Among other things, we find when Railtrack announced after the Hatfield crash that there would be a six month programme of emergency track repairs, the group's share price was marked down but it did not plummet. Even though Railtrack were in panic mode, it appears that investors decided to hold on to their shares, believing that the panic would have no long term repurcussions. This proved to be a huge error of judgement.

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