Investopedia: YRC Worldwide Jackknifes Investors

It is a never-ending curiosity to see how often investors will buy up the stock of bankrupt companies; it is virtually always an invitation to total wipeout and the scant successes don't pay for the multitude of failures. While YRC Worldwide (Nasdaq:YRCW) has in fact managed to avoid bankruptcy, common shareholders have been all but wiped out and there is little reason to think that the company can make the sort of recovery that will redeem the massive dilution the company undertook to stay in business.

Doing What Must Be Done
Trapped between a rock of unimpressive freight rates and rising fuel costs and a hard place of high labor costs and a debt-soaked balance sheet, trucking analysts and investors have been speculating about the bankruptcy of YRC Worldwide for some time. While the company has avoided bankruptcy through an adroit combination of recapitalization and cost renegotiation, it may all be effectively for naught for shareholders. (Investors need to be aware of the existence of dilutive securities and how they can affect existing shareholders. For more, see The Dangers Of Share Dilution.)

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