YRC Worldwide Inc (YRCW)

[GuyBig]

Shorting into earnings Here

I think it'd be unwise, but a case can be made for doing so, primarily because of the potential additional dilution. At just above 21 today on April 24, 2014, YRCW was above its 10 day and 50 day moving averages, calculated every which way. Shorts may add to their positions if they have a lot of nerve and a lot of captital.

Shorting above 21 here could be construed to be a decent speculation since a negative earnings surprise, what with all the restructuring that's just occurred, could sorely disappoint investors who have been holding on. A negative surprise could see the stock drop down to 16 or further still to 12 in less than a day or two. Would management write things down and take charges for restructuring just as market demand is turning up? That occurred in both the 2nd and 3rd quarters last year, but most of those losses have already been taken and most of the restructuring has ALREADY occurred. What's left is to buy or rent new trucks and trailers and to fix the fleet. Would Welch decide that should be done all at once or done gradually? I think gradually and think there will NOT be any restructuring charges this quarter.

A speculator who IGNORES the improving fundamentals and how thinly the stock has traded over the past two months could possibly profitably short the stock here.