Saturday, October 02, 2010

YRC Worldwide triggers reverse-stock split; share price jumps

YRC Worldwide Inc. shares surged, then plummeted Friday after the company executed a reverse-stock split.

Shares for the Overland Park-based company converted from 25 cents a share at the end of trading Thursday to $6.25, reflecting the 1-for-25 share split.
By the end of Friday, however, the share price had fallen 86 cents, or almost 14 percent, to $5.39.

YRC is pursuing a new game plan — including potentially extended union concessions — for getting the company through a multiyear slump. Part of that plan included triggering a 1-for-25 reverse-stock split Friday to cut the ballooning number of shares and boost their value, keeping YRC shares from being delisted.

The split reduced the number of outstanding common shares from 1.2 billion to 48 million. More important, the company wanted to bring its stock price to exceed the benchmark of $1 so it could continue to be listed on the Nasdaq exchange.

YRC has scheduled an Oct. 7 hearing to appeal Nasdaq’s move to delist the stock.
Although the stock price is well above the previous 52-week high, at least one analyst fears that later plans to convert debt into stock might dilute the stock again and had advised clients on Thursday to sell their shares after the reverse-stock split was complete.

Also Friday, Nasdaq temporarily changed YRC’s stock symbol from YRCW to YRCWD. Nasdaq said on its website that the suffix “D” is a new tool indicating “a stock split or some type of reorganization.” The symbol will revert back to YRCW on Oct. 28.

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