Shares of YRC Worldwide plunged more than 20 percent in trading on Wall Street Thursday after an industry analyst urged investors to "get out of the stock today" when the troubled trucking giant said it would execute a reverse stock split.
Here's big kudos to Stifel Nicolaus hiring a sharp analyst like David G. Ross. It's too bad more firms wouldn't look at my own resume, or they could have had the benefit of my opinions on YRC Worldwide and kept their clients well-informed.
Let's get back to the trucking firm itself. I had speculated about what the big announcement from YRC Worldwide would be in my last post about the company. It turned out to be two steps forward with one step back. The reverse split and forgone pension contributions are absolute musts for the company to have any hope of lasting through 2011. The step backward comes from granting the Teamsters a huge say in running the company, including another board seat. Huh? What do a bunch of truck drivers know about accounting, sales, and Six Sigma? Nothing, of course, but that won't stop unions from running the firm into the ground.
Look, something changed already! They put a "D" on the end of their ticker after launching the reverse split as an acknowledgement of a corporate reorganization (reversion to YRCW happens Oct. 28). If only their operating results could move that fast. The new shares closed at $5.39 today. Watch it sink back to pennies faster than a run flat brings a big rig to a halt.
Full disclosure: No position in YRCW.