Thursday, February 11, 2010

Notable financing, of the "Teamsters" sort (YRCW)

SHOCKER!  YRC Worldwide will further dilute shareholders, in order to live another day....

Yellow Roadway / YRC  (YRCW) has assured further downside for its common stockholders, who should have run away the minute they started paying the Teamsters off in company stock.

The shares were down 4pennies today on news that they've found buyers for $70million in unsecured notes.  The only way anyone with a brain would lend money to this company on an unsecured basis is if it's on give-away terms.  And it is.  The notes pay 6%, PAYABLE IN COMMON STOCK.  And they convert at 43cents, frickin' 32% lower than where the stock is trading.  All while shorting the stock as it falls.

Considering that the notes convert at 43cents, but the interest can be paid in common shares, this deal would seem to be valuing the common stock well below even that 43cent level...

How they got here:

Thanks union labor!

Copyright 2010 AlphaNinja

1 comment:

  1. Unions have run their course and no longer are needed in todays work force.