RE: a blog posting about Yellow
I'm very interested in hearing the arguments against Yellow, to see how strong they are. This blog post sounds like it's the conventional wisdom.
The blogger doesn't know anything that we don't. Actually, there's been more detailed, specific discussion about Yellow's financial position on this board. (I'm not counting posts like "I just bought 5 million shares, it will go to $50" and "yellow sucks only losers own it".)
The way I see it, Yellow does have enough cash flow to continue paying the dividend and pay down the debt. (The market clearly has strong doubts about this.) If that's a problem, they have several actions they could take before they need to even consider bankruptcy.
They could reduce but not eliminate the common dividend, and force conversion of A and B into common with full dilution in 2012. This would save them some $50 million per year in dividend payments and make $400 million of debt disappear.
If they need to go further, they could eliminate the common dividend and suspend the preferred dividend. A couple of years later, when they return to paying common dividends they would need to make up the missed preferred dividends. This would save or delay some $120 million per year in dividend payments (and remove $400 million of debt if they also do the preferred conversion).
It's only if neither of these approaches is enough that they would need to consider bankruptcy.