"It is with deep disappointment that Yellow announces its closure after nearly 100 years in business," CEO Darren Hawkins said in the statement released yesterday. Yellow is a long-standing player in the sector, specializing in the LTL (less-than-truckload) segment, i.e. transporting goods on behalf of several customers in a single truck. Customers include Walmart, The Home Depot and Amazon. At the end of July, the Teamsters union announced that the company would cease operations. Relations between the company and its employees deteriorated after Yellow sued the union in Kansas federal court to block a strike. In the end, both sides agreed to return to work, even though management felt that the backlog would bury the company.

A carrier in difficulty for 15 years

Yellow had received exceptional support in the form of a $700 million loan from the Trump administration, but efforts since then had failed to turn the company around. The company was notoriously poorly managed over the previous decade, during which its share price had plummeted to alarming proportions. It had already narrowly escaped bankruptcy at least twice, notably in 2020, when it owed its salvation only to a general wage cut agreement.

Descente aux enfers

One more meme-action

Some 30,000 employees are out of a job. Given the overcapacity in the transport sector following the pandemic outbreak, Yellow's slots have already been taken over by competitors, according to the Wall Street Journal, which adds that Chapter 11s in the transport sector often result in liquidations. However, there have been rumors of a potential buyer at the court.

An interview with the head of XPO, a Yellow competitor, who explains that his group has recovered market share.

The share price has risen fivefold in recent trading sessions, as Yellow has become the new favorite "fallen angel" of small investor forums. The latest news is likely to deflate speculation. Unless a new twist comes along?