YRC Worldwide Inc. (NASDAQ: YRCW) is a company with a stock that just cannot seem to ever get it right. Despite having more than quadrupled from its lows of last year, the trucking company’s shares have been in the penalty box this week. Friday is shaping up to bring an even weaker close to an already bad week.
YRC’s labor pressures and debt payments coming due are both adding to the downside here. It turns out that YRC has failed to win a contract extension from the union, the International Brotherhood of Teamsters. Employees did not approve its memorandum of understanding extension proposal, although the company is still reportedly in contact with the union.
Perhaps the real issue here is that this agreement is required for the company to refinance about $1 billion in debt coming due soon. This could lead to bankruptcy, according to many reports, and the company has recently signaled this risk as well.
YRC keeps losing money, and it is expected to keep losing money. Analysts have abandoned the stock. Another issue to consider is that it would be a penny stock if it were not for reverse stock splits.
The company has previously forecast that it will not have sufficient liquidity to repay its debt if it cannot restructure or refinance its debt on the books now. Without a labor agreement, this is a serious conundrum for YRC and for its employees.
Shares were down 20% at $12.42 in mid-Friday trading, but this was a $20 stock as recently as Tuesday January 7.
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