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YRC Worldwide Inc. Message Board

  • ohjustsettledown ohjustsettledown Oct 14, 2010 4:32 PM Flag

    Another New Analyst Report on YRC

    I saw that TA posted a new Ed Wolfe note. I hadn't seen that, but I did see another new one by Stifel Nicolas. Excellent deep analysis. Came out yesterday. Sorry, no link, just hard copy.

    "...We are reiterating our Sell rating on YRCWD and continue to believe that the equity of YRC has significant downside potential, because in order to complete its second annual out-of-court restructuring, it would need to essentially give the (equity of the) company (again) to lenders, significantly diluting current shareholders. Moreover, YRC has focused mainly on survival and not on improving its competitive positioning over the past few years, allowing other LTL carriers to improve their relative positioning in the market. Therefore, we believe YRC will continue to lose market share.

    Furthermore, for the current restructuring plan to go through, $300mm of new equity (the "capital event") needs to be raised by 12/31/10. YRC equity investors in 2009 lost big. The bondholders that converted their YRC debt to equity have seen the equity value decline 81% year-to-date (with more to go, in our view). With those precedents, we are unsure why any investor would want to purchase a significant amount of new equity in a company that, in our opinion, has no sustainable competitive advantages.,,"

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