Highway to Yell

Here's a glimpse of things to come, at least for the lucky. Yell, like much of the rest of the directories sector, has seen its equity crushed (down 76% year-to-date), and its debt whacked, seemingly reflecting waning market confidence that it can reinvigorate itself in the face of a secular shift to online advertising and a generational shift to search/recommendation engines and away from traditional directories. Clearly sensing that it is in for more pain as advertising spend contracts, secular shifts intensify, and businesses fail, it is sensibly asking for more headroom in its debt covenants, but notice that it is paying a 1% step-up and 0.5% consideration for the amendments. (I like the reference in the press statement to the effect that acceptances were overwhelming - is that really surprising after the bloodbath of the past month?) I almost feel sorry for these businesses - most were sold under financial duress by the telcos, or because their former owners didn't really get why they should be in the space, and now have to find their feet without all the potential benefits of telco ownership. This is a shame, because I believe the directories players would be hugely beneficial to telcos as a complementary sales/relationship channel, and the telcos could be the engine which revolutionizes communications, business processes and customer care for the currently withering client base of the directories companies. Hindsight is 20/20...