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STOCK FEDEX

STOCK FEDEX

about FedEx corporation

This is a pretty depressing picture for FedEx: tough industry fundamental and big negative EVA. We know that FedEx return are negative on a market-adjusted basis. Why hasn’t its stock price fallen in absolute terms? How can we rationalize the expectation that FedEx will preserve the value that it currently has?


It dropped a little bit but not much. FedEx has been the darling of the market for a long time such that FedEx is no longer a noun but a verb. The company is basically suffering from two problems, fuel costs and the downturn of business in general due to the economy. They have been continually addressing the fuel problem by replacing inefficient or smaller jets with larger fuel efficient ones like the 757 and their first 777's next year.
Because of all of this and the fact that the company is well run, the market thinks it will be one of the first to turn around.

So, why did you short the stock?

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