U.S. trucking company Yellow Corp’s ($YELL) shares drop 45% to $1.97/share premarket after filing for Chapter 11 bankruptcy protection
The bankruptcy filing estimates assets and liabilities of $1 bln to $10 bln, with more than 100,000 creditors
This 100-year-old company rose as much as $5/share last Tuesday after Teamster said the company would be shutting down. The stock has jumped over 5x from near record low levels in the past five sessions; YTD, shares are up 42%
In 2020, during the peak of the COVID-19 pandemic, the U.S. government loaned Yellow $700 million and the Treasury Department acquired approximately a 30% equity stake in the company. Yellow is also grappling with over $1 billion in debt due next year, which it has found challenging to refinance, consequently its cash reserves dropped from $235 million in December to approximately $100 million in June.
$YELL has 30,000 employees, the third-largest less-than-truckload carrier in the U.S.
“It is with profound disappointment that Yellow announces that it is closing after nearly 100 years in business,” said CEO Darren Hawkins.
Chart
The daily chart shows what could be a level 2 buyer with a possible upside continuation toward $6.50 and a possible drop to support at $1.50 and $0.50. Currently the likelihood of a test of $1.50 is firmly on the cards.