Why YRC Worldwide, Inc.'s Shares Jumped Today
Jan 29th 2014 2:36PM
Updated Jan 29th 2014 2:38PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: The wild week for YRC Worldwide's shares continued but today the stock was up 11% in a steady rise, unlike the wild ride on Monday.
So what: A contract that the Teamsters union ratified over the weekend will meet conditions needed to help the company refinance its operations. About $300 million of debt will be converted into equity, and management is looking to refinance $1.4 billion worth of debt and was meeting with lenders to discuss yesterday.
Now what: Bankruptcy appears to be off the table for now and the certainty is giving investors a reason to jump back in. Management expects EBITDA to grow by about $100 million next year to $350 million-$360 million, due primarily to the contract. There's definitely upside for investors if management can execute on its plans but analysts still expect a loss for this year so it's a speculative bet right now.
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The article Why YRC Worldwide, Inc.'s Shares Jumped Today originally appeared on Fool.com.Travis Hoium has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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