Yellow, a long-standing and prominent trucking company in the country, has made the difficult decision to file for bankruptcy due to mounting debt and an ongoing labor dispute with the Teamsters union.
Despite this challenging development, Yellow's stock experienced an astonishing surge of over 400% last week during the five trading sessions leading up to Friday. Although the company's shares dipped 25% to $2.68 in pre-market trading on Monday, they still maintain a near 350% increase since Yellow's announcement of its closure.
Established 99 years ago, Yellow filed for Chapter 11 bankruptcy protection on Sunday and is now seeking court approval to make various payments, including wages, salaries, and benefits owed to its employees. Regrettably, this closure will result in the loss of approximately 30,000 jobs. In its statement on Sunday, Yellow recognized its employees as "unsung heroes throughout the pandemic."
Yellow is optimistic about securing a loan to assist with its marketing and sale process in the coming months.
CEO Darren Hawkins expressed deep disappointment in the closure of the company after nearly a century in business. He noted how rare it is for individuals nowadays to remain with one company for extended periods, emphasizing that many at Yellow have dedicated 20, 30, or even 40 years of their lives to the company.
Having notified the Teamsters union last week of its operational shutdown and subsequent bankruptcy filing, Yellow faced challenges in refinancing its debt of $1.3 billion maturing in 2024. The union's obstruction of Yellow's operational overhaul earlier this year contributed to the loss of business opportunities.