Yellow Corp. stock dives on bankruptcy filing

Shares of Yellow Corporation (YELL) plummeted in early trading after the trucking company filed for Chapter 11 bankruptcy protection. Yahoo Finance checks on rivals' shares and discuss how Yellow Corporation shares have started to become meme-like.

Video Transcript

JULIE HYMAN: Shares of Yellow Corp, they're falling on news the company is indeed filing for bankruptcy after nearly 100 years of business. And this comes about a week after the logistics provider halted its operations, putting about 30,000 people out of work here. Competitors like XPO, JB Hunt, Werner Enterprises, we are watching some of those stocks. XPO, another LTL, Less Than Truckload carrier here.

The others overlap other parts of the business. But we're going to be talking to XPO CEO Mario Harik at about 10:30 AM Eastern. Normally, I have to say-- we're looking at these Yellow shares today-- normally, we wouldn't even check on shares of a company that was declaring bankruptcy, right? Because it's going to get the Q symbol after it.

But Yellow has become, as we've seen with some of these examples of companies filing, a little meme-y, right? So clearly, people are still trading in and out of this thing and have been in recent weeks, even though it was becoming increasingly clear, especially after they stopped their operations last week, that this was going to be the likely outcome. So it's interesting to see still a lot of activity in this stock.

BRAD SMITH: Yeah. A lot of investors perhaps out there hoping for a miracle on Wall Street, but there isn't one in sight right now. I think if you're thinking about the different parts of the operation for Yellow too, it comes back to the employees, where those other employees within this job economy, and we were talking about this earlier this morning, where they find employment elsewhere now.

Do they go out to some of the other major trucking companies and try to find employment there? And is there some type of play at least for the-- not catalog. I almost a catalog-- but the fleet of trucks as well here for Yellow Corporation. And that's a large question that still lingers as of right now.

JULIE HYMAN: Yeah, there's a lot of different dynamics at work here. I mean, yellow is kind of blamed unions for the Teamsters for driving them into bankruptcy. They've pushed back, of course. But in the background, there has been falling demand for these less than truckload shipments as we have seen this shift in the US economy more toward services from goods. That's been one of the outcomes of this.

But there's a lot of other dynamics at work too. There's been a trucker shortage for years that has been going on. So it'll be an interesting conversation with Mario later to talk to him about all of this and how it's affecting other companies in the space that perhaps are not as indebted as Yellow was.

BRAD SMITH: And the amount of owner operators that a company like Mario's-- and well, XPO and RXO so separate now, but that they have really kind of annexed their own operations too. So that'll be interesting to discuss with him a little bit later on in the show.