YRC Worldwide Stock Makes Another U-Turn

The post-holiday trading week dawned bright for shareholders of YRC Worldwide (NASDAQ: YRCW  ) . After a weekend of pent-up demand, buyers exploded onto the markets in a frenzy of stock shopping Tuesday. But why?

The reason investors are so hot on YRC's prospects (again) is actually pretty simple: The on-again, off-again negotiations between management and employees, aimed at securing a long-term labor contract so that the company can refinance its debt -- are on again.

On Friday, after close of trading for last week, and long before anyone would be able to begin trading again this week, YRC management confirmed that it has reached a "tentative agreement" with the leadership of the International Brotherhood of Teamsters. The substance of this agreement: Teamsters leadership will back passage of a new collective bargaining agreement that will lock workers into a new compensation structure, and new rules for work, that will stretch to March 2019.

Despite having four days in which to clarify what exactly is contained in this "tentative agreement," YRC has yet to do so. So far, all they've let on is that the new deal "contains a number of revisions to the company's previous proposal" -- which was rejected two weeks ago in a resounding, 61% to 39% rebuff.

What comes next
Sometime today, local union representatives are expected to review the terms of YRC's revised contract proposal. Presumably, if the union reps find the new terms acceptable, this review will be followed by a new vote on the revised terms by union membership.

At that point, there will really be only two possibilities: Either the union approves the contract, and YRC proceeds with plans to convert $300 million-plus worth of its debt into equity, as lenders take a greater stake in the company in exchange for lowering their demands for annual interest ... or the union rejects the contract.

In management's view, though, there's really only one choice: "The MOU extension is ... the best -- and only remaining -- path forward." Failure to approve it likely means failure of the company to survive.

Lost money on YRC? Here's a chance to make it back
Have you lost money in the the 75% slide of YRC Worldwide stock these past few months? We can't promise to make it all back for you quickly, but we can help you recoup your losses slowly. How?

Dividend stocks can make you rich. It's as simple as that. While they don't garner the notability of high-flying growth stocks, they're also less likely to crash and burn -- like YRC. Over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 22, 2014, at 1:12 PM, Mustang6147 wrote:

    There is really nothing new in this recent proposal. If it gets voted in, the first one might as well have been. Both are identical, and a shame.

    I know our Teamster leadership can do better if we send them back 1 more time.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2803630, ~/Articles/ArticleHandler.aspx, 10/1/2014 8:40:49 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement