While most of the world was focused on the potential disaster between UPS (NYSE:UPS) and the Teamsters union, there was another, smaller disaster taking place in the background. That disaster was Yellow Corporation (NASDAQ:YELL), who faced financial ruin. Yet, in the last minutes of Tuesday’s trading day, Yellow was up over 156% on news that the disaster may have been averted after all.
Only days ago, Yellow was on the verge of calamity. But that seems to have turned around, as reports noted Apollo Global Management was looking to step in and provide some financing to help keep Yellow afloat. The reports noted that a “debtor-in-possession” deal was in its final stages, which would help keep Yellow’s operations going. Given that Apollo actually owns a substantial quantity of Yellow’s loans, offering up one more to keep the company going might be a worthwhile play for Apollo.
However, this doesn’t do much to address the larger issues here. Yellow was already pushing toward bankruptcy; would its continued operations help keep it going? A Fox Business report notes that Yellow has long struggled with debt, and its financial troubles go back “several years” as it stood. In fact, Yellow will have $1.3 billion in loans coming due next year. So will Apollo’s latest loan keep it going, or is it just postponing the inevitable?
A look at Yellow Corporation stock’s last five days of trading shows an almost disturbing point. It’s been on an upward cant that entire time. It’s not just the latest news that gave it a boost, either. In fact, in the last five days, Yellow Corporation stock has gained 828%.
