Yellow Freight closure thread

You're right. He won't, but there's probably enough people that would jump in a truck seat if the company is backed by one of the richest people on the planet.

It actually would make sense for Amazon

 

It would be an interesting development. Transitioning an LTL company into something akin to FedEx Ground, but operating with company owned and operated equipment and company drivers instead of 3rd party carriers.

Question is, how much would Amazon be investing into this? Not only the purchase of Yellow itself, but how much to convert and optimize a freight operation into a package operation?

 

The time for that is long gone.

In 2012 YRC convinced the union to sign an lousy contract which allowed them to attract a BUNCH of private money. YRC proceeded to grind down over the next 18 months and has sat right around $7 a share ever since, paying no dividends. If you look at SEC required disclosures, most executives and board members have been selling off their stock options as soon as legally allowed since 2019. From a venture capital perspective, there's no meat left on the bones to make soup.

There are 52 million shares outstanding, so any buyout would cost $60 million (minimum) and come with a $1.5 BILLION debt service. Not to mention any buyer would also be inheriting YRC's system - a system that has proven itself to be a loser. I think someone with $1 billion in financing could easy replace YRC from the ground up, so why pay $1.5 billion?

 

No doubt it would be a throw away. Also why buy something that would not even work for their own network. I see them going broke or another government help. I think this is why they extended it because the government might get involved for another bail out. They seem to have some decent reach on both sides from the government.

 

I dont see anyone bailing them out ...AGAIN .
The best they might do is get the freight out of theyre system and close the doors and that's a big if .
Just a big auction coming next .

 

There's no way Amazon would buy this debt laden sinking ship. They can create their own LTL from scratch if they want to like they did with truckload. They pay dirt cheap rates to leased o/o who think it's great because the loads are light + drop/hook. How does that translate into paying top dollar for union LTL drivers? They don't even employee W2 drivers for truckload and they'd want to own a union LTL carrier? They outsource all that in the cheapest way possible.

 

Or as someone suggested the other day my neighbor Warren Buffet lol .

 

It's an interesting thought (or so I thought) but likely won't ever happen. Still fun to ponder though

 

I saw that lol. It's a good thing he didn't take investment advice from truck drivers.

 

It was just a rhetorical thought