Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of container-shipping company Horizon Lines
So what: What a day for Horizon Lines' investors. The company announced today that it reached an agreement with the U.S. Department of Justice to plead guilty to price fixing and pay a $45 million fine. The fine could shake up the company's financing arrangements as the judgment would trigger default conditions, though Horizon is hoping to get that waived. Chairman and CEO Chuck Raymond announced he is retiring, and COO John Keenan is taking a leave of absence. Neither Raymond nor Keenan are covered under an agreement with the DOJ to not pursue criminal charges against current Horizon Lines executives. The company also said that adjusted 2010 EBITDA will likely come in at $96 million, missing the $106 million that analysts were looking for. Could there be anything else? Oh yeah, the company suspended its dividend.
Now what: I couldn't blame Horizon Lines shareholders if they feel like they just got kicked in the gut -- that's a lot for one day's news. If we're looking for a silver lining here, management said it expects EBITDA to be higher in 2011 compared to 2010, though it didn't offer any specifics. Additionally, while it looks pretty ugly for Horizon Lines right now, it's sometimes in situations like these where investors can find value, so it could be worth taking a closer look at the stock.
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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.