Stay Away! Nasdaq-Booted Yellow Stock Is Completely Toxic.
Trucking is truly the backbone of American commerce. Yet, not every trucking business is destined to succeed. Unfortunately, Yellow (OTCMKTS:YELLQ) is failing spectacularly and YELL stock (now changed to YELLQ stock, as we’ll discuss in a moment) could easily be headed for zero.
Of course, this won’t stop the meme stock traders from taking an interest in Yellow.
If you’re a sensible investor, though, then you should let the meme team have their fun (and lose their money, most likely) as the ending to Yellow’s story won’t be a happy one.
What Happened to YELL Stock?
Once a thriving and perhaps even iconic trucking business, Yellow had recent financial backing from the likes of hedge fund MFN Partners as well as mutual fund giant Vanguard Group. I pleaded with financial traders to stay away from YELL stock.
Yellow shares gained value for a short period of time, probably because of the recent revival in meme stocks. At the same time, Yellow was engaged in ongoing conflict with the Teamsters union.
Yellow had, according to The Wall Street Journal, “$1.3 billion in debt maturities [due] next year.”
Earlier this month, the Teamsters union considered a class-action lawsuit against Yellow. I don’t have any updates on that story now, but Yellow is probably at a major disadvantage here.
In any event, don’t bother trying to find YELL stock on the Nasdaq, as it’s been suspended from trading on that exchange. If you want to invest in Yellow today, you’ll have to look for the over-the-counter (OTC) stock ticker YELLQ.
Yellow Winds Down Its Business
The deeper we look into the Yellow story in 2023, the worse it gets. Yellow officially filed for Chapter 11 bankruptcy protection earlier this month. Given the company’s dire financial situation, Yellow’s Chapter 11 filing was probably inevitable.
Consider that Yellow’s second-quarter 2023 net earnings loss was $14.7 million, or 28 cents per share. In the year-earlier quarter, Yellow reported net income of $60 million, or $1.17 per share.
Additionally, the WSJ reported that Yellow is shutting down its operations. More recently, the WSJ indicated that Yellow is winding down its business and selling its assets.
For what it’s worth, Yellow apparently intends to repay the $1.2 billion it borrowed from the U.S. government and private lenders.
This shouldn’t provide much solace to Yellow’s current investors, however. No matter how you slice it, Yellow is going down the tubes and there’s no need for sensible financial traders to get involved.
Just Say No to YELL / YELLQ Stock
YELL stock is gone from the Nasdaq exchange, and Yellow is going bankrupt. The company is apparently winding down its operations but might still have to deal with legal issues.
The point is, there’s absolutely no reason to invest in YELLQ stock. Yellow might have briefly caught the attention of meme stock traders, but the company is in terrible shape. Therefore, serious investors should look elsewhere for buy-low, sell-higher opportunities.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
