With its stock now at $0.89 (closing price today), it seems the investor community has given up on YRC Worldwide (Yellow/Roadway).
The stock is down 80% year to date and down to less than a dollar from its 2005 high of about $62.00. Since last fall, it has been trading roughly in a $6.00 to 2.00 range, gradually trending downward to the $2.00 level. Now it has reached penny stock levels at $0.89.
Not long ago, YRCW represented about 20% of the LTL market. Competitors have been wishing YRCW would get it over with and go bankrupt so a measure of pricing power can shift from shippers back to carriers. At least some shippers have been supporting YRCW in an attempt to keep it above water, thereby maintaining a truck capacity surplus that will keep downward pressure on freight rates.
I don't see YRCW making it and it appears the competitors may get their wish. If so, it may be good news for expediters too from a freight pricing point of view.
Even if YRCW manages to go into Chapter 11 and come back out, or somehow manages to struggle through without filing bankruptcy, the restructured company will be a fraction of its former self.
And so it goes as the recession continues on.
Edit: Please forgive the $0.96 price in the subject line. I started the post when the price was there, edited it to the closing price in the text but posted it before correcting the $0.96. My bad. Subject lines cannot be edited.
The stock is down 80% year to date and down to less than a dollar from its 2005 high of about $62.00. Since last fall, it has been trading roughly in a $6.00 to 2.00 range, gradually trending downward to the $2.00 level. Now it has reached penny stock levels at $0.89.
Not long ago, YRCW represented about 20% of the LTL market. Competitors have been wishing YRCW would get it over with and go bankrupt so a measure of pricing power can shift from shippers back to carriers. At least some shippers have been supporting YRCW in an attempt to keep it above water, thereby maintaining a truck capacity surplus that will keep downward pressure on freight rates.
I don't see YRCW making it and it appears the competitors may get their wish. If so, it may be good news for expediters too from a freight pricing point of view.
Even if YRCW manages to go into Chapter 11 and come back out, or somehow manages to struggle through without filing bankruptcy, the restructured company will be a fraction of its former self.
And so it goes as the recession continues on.
Edit: Please forgive the $0.96 price in the subject line. I started the post when the price was there, edited it to the closing price in the text but posted it before correcting the $0.96. My bad. Subject lines cannot be edited.
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