The company received a $700 million loan from the federal government in 2020, a loan that resulted in taxpayers holding 30% of its outstanding stock. And the company still owed the Treasury department more than $700 million according to its most recently quarterly report, nearly half of the long-term debt on its books.
Yellow’s stock lost 82% of its value between the time of that loan and Thursday close after reports of the bankruptcy plans, closing at only 57 cents a share. It bumped up 14 cents a share on Friday, but still remained a so-called penny stock.during the pandemic, despite the fact that at the time it was facing charges of defrauding the government by overbilling on shipments of items for the US military.
Yellow handles pallet-sized shipments of freight, moving shipments from numerous customers in the same truck, a segment of the trucking industry known as less-than-truckload, or LTL. The company had been claiming as recently as June that it was the nation’s third largest LTL carrier. But the company handled only about 7% of the nation’s 720,000 daily LTL shipments last year, said Jindel. He said there is about 8% to 10% excess capacity in the LTL sector right now, so the closure of Yellow shouldn’t cause a significant disruption in supply chains. But he said it will cause higher rates for shippers who depend on LTL carriers, since it was the excess capacity that sent prices lower.“The reason they were using Yellow was because they were cheap,” he said.
South Africa South Africa Latest News, South Africa South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: Reuters - 🏆 2. / 97 Read more »