Anthony Alfidi's  Instablog

Anthony Alfidi
Send Message
Anthony J. Alfidi is the founder and CEO of Alfidi Capital, a private research firm in San Francisco, California. Alfidi Capital publishes free financial research with honesty and humor. Mr. Alfidi holds a Bachelor's degree in human resource management from the University of Notre Dame (cum... More
My company:
Alfidi Capital
My blog:
Alfidi Capital Blog
  • YRC Worldwide Asks For Stay Of Execution 0 comments
    Dec 23, 2010 11:47 AM | about stocks: YRCW

    YRC Worldwide is looking for a way out of a death spiral debt trap.  Its creditors are giving it a little slack, but other stakeholders may not be so understanding:

    YRC Worldwide is asking the Teamsters union and pension fund managers for more time to restructure the trucking company’s troubled balance sheet.

    I have to hand it to YRCW's management.  They manage to stave off one short-term disaster after another.  The Teamsters are a different story.  The new creditors' agreement may embolden them to ask for accelerated reinstatement of the pension plan contributions they surrendered. 

    Recapitalizing a balance sheet involves writing down debt and/or injecting equity.  Forget about the debt writedowns; creditors extended the payment timeline with the expectation that their positions won't be written down at all.  That leaves YRCW with a need for more equity in Q1 of 2011.  Hmmm, they just went through a reverse split to raise their share price past the de-listing threshold, so issuing more shares means dilution.  They'll be right back in the NASDAQ de-listing queue with that move. 

    I still don't see a happy ending for this company, but comatose patients have been known to hang on for years before either reviving or expiring.  I am not aware of any coma patient who could revive while a cancer was eating away inside them.  YRCW's cancer is its unionized workforce.  It is time to cut them out to ensure survival. 

    Full disclosure: No position in YRCW.
    Stocks: YRCW
Back To Anthony Alfidi's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.