Shares of Yellow Corp. soared Tuesday, following a record rally in the previous session, despite reports that the trucking company had closed its doors after nearly 100 years in service.
The less-than-truckload company
YELL,
with nearly 30,000 employees, has shut down operations as it prepares for bankruptcy, The Wall Street Journal reported over the weekend.
And the International Brotherhood of Teamsters said Monday it was served legal notice that Yellow was “ceasing operations and filing for bankruptcy,” which has been widely expected.
“Today’s news is unfortunate but not surprising,” said Teamsters General President Sean O’Brien. “Yellow has historically proven that it could not manage itself despite billions of dollars in worker concessions and hundreds of millions in bailout funding from the federal government.”
The Teamsters’ statement comes about two weeks after the union said it was prepping for a strike after Yellow missed a deadline for a benefits contribution, and just days after the strike was averted.
Yellow has not issued a press release since last week or responded to a MarketWatch request for comment.
Still, the stock soared 61.4% in midday trading Tuesday, after skyrocketing a 149.0% on Monday, which was biggest one-day gain since the stock went public in June 1983.
The stock has run up 300% in two days, and has increased about 5-fold since closing at a record low of 57 cents on July 27.
Read more about why some stocks have rallied despite bankruptcy filings.
What might also be providing a boost to Yellow shares, hedge-fund manager MFN Partners LP disclosed on Tuesday that it owned 22.07 million Yellow shares, or 42.5% of the shares outstanding.
That means MFN bought about 9.3 million shares on Monday, as it had disclosed before Monday’s opening bell that it owned 12.77 million Yellow shares, or 24.6% of the shares outstanding, last week.
MFN, which is now Yellow’s largest shareholder, according to FactSet data, said it bought the shares “for investment purposes.”
The second-biggest shareholder is now the U.S. Department of the Treasury with a 30.7% stake, according to FactSet.
Among the LTL companies that TD Cowen analyst Jason Seidl wrote recently stand to benefit from Yellow’s troubles, shares of Saia Inc. SAIA surged 2.8% toward a record close in midday trading Tuesday, after pulling back 0.7% on Monday.
The stock has rallied 17.3% since July 17, which was the day before the Teamsters said it was prepping for a strike.
Old Dominion Freight Line Inc.’s stock
ODFL,
slipped 0.2% after falling 1.9% on Monday. The stock had closed at a record $427.59 on July 28, after running up 11.6% since July 17.
And shares of XPO Inc.
XPO,
rose 1.1% after falling 3.3% on Monday, while ArcBest Corp.’s stock
ARCB,
eased 0.3% after shedding 2.6% the day before.
XPO’s stock had closed at a record $71.65 on July 26, and ArcBest had closed at a 19-month high of $119.41 on Friday.
ArcBest’s stock had reached the 19-month high on Friday despite the company reporting second-quarter profit and revenue that missed expectations. TD Cowen’s Seidl said the reason for the stock’s gain was likely due to expectations of Yellow freight diversions, as he saw ArcBest as a “natural alternative” to Yellow.
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