With the passage of Proposition 1A by California voters in 2008, the era of high speed rail has materialized into a reality. While construction is expected to begin in 2012, construction is expected to take until 2020 at a cost of 45 billion.
Determined to ride the wave of popular support for high speed rail is Las Vegas Railway Express (OTCPK:XTRN), a business development company with designs on tapping into the 12 million people who travel from the southern California area on the I-15 to Las Vegas.
While the time to travel to Vegas will be much the same at 5.5 hours, the time spent will be far more enjoyable and luxurious. Fully equipped with casino tables, a bar, a celebrity chef, it has been dubbed by a local tv station as the "party train".
The plans are to board passengers out of Las Angeles Station and use existing rail, paying a premium to have priority at train interchanges. Amtrak had a railway to Vegas but has ceased operations.
Twenty dual-level railcars are proposed with purported agreements already in place with AMTRAK, Burlington Northern Santa Fe, and Union Pacific. In the six months ended Sept 30th $681,000 has been raised, mostly for the purpose of paying administrative costs for management who are pushing forward the plans. Should some larger investors come in and financially back this project it could be a blossem into something worth investing in. At present, with the capital markets the way they are, it makes it that much harder for such a capital-intensive company, as one involved in rail is, to raise the necessary funding to help the business meet their proposed deadlines.
As reported by the Las Vegas Business Press on June 1st 2010, not everything with this enterprise is as it would seem. Michael Barron, the company's CEO, has a history with penny stocks and recently filed for chapter 11 protection from another penny stock he managed as a means of lawsuit protection. The Las Vegas Business Press goes on to expose that the aforementioned Transportation Management Service, Union Pacific, nor Burlington has had any agreements signed with the company. This writer reccomends sticking to Nasdaq/AMEX/NYSE listed companys any number of whom offer ten-bagger opportunties with far less risk than OTCBB or Pink Sheet companies.
Disclosure: no position