Revlon shares jump 269% since filing for bankruptcy last week
Shares of cosmetics giant Revlon Inc. are up 18 percent since Tuesday, with the stock going through its best three-day period on Wall Street since filing for bankruptcy last week.
By closing Thursday, the stock was up $7.20 a share, up 269 percent over the past week, after individual investors gave the company a wave of what appears to be the latest stock meme phenomenon.
More than 186 million shares were traded on Tuesday, the most in company history, and another 175 million on Wednesday, mostly from individual traders, the Wall Street Journal reported.
Bets on the company’s future were at an all-time high this year, as more than 210,000 contracts were traded on Wednesday, with the most popular option-seeking stock rising another $10.
The deluge of support and trading for the popular makeup company is reminiscent of when investors massively game to support GameStop against Wall Street investors betting on the company’s demise.
By closing Thursday, Revlon stock was up $7.20 a share, up 269 percent over the past week following a bankruptcy filing.
The outpouring of support appears to be another example of the meme stock phenomenon, with thousands of bets that the stock will rise another $10
The makeup giant has seen its stock plummet this year, hitting a low of $1.17 last week
Shares of Revlon hit their lowest point on June 13, at just $1.17 a share, as speculation grew that the cosmetics giant would file for bankruptcy, which happened two days later.
“Consumer consumer demand for our products remains strong – people love our brands and we still have a healthy market position,” Revlon CEO Debra Perelman said in the bankruptcy filing. “But our challenging capital structure has limited our ability to navigate macroeconomic challenges to meet this demand.”
After filing for Chapter 11 bankruptcy last Wednesday, the stock nearly doubled by the end of the next day, continuing to rise in the “meme stock” fashion.
Many individual investors on Reddit’s WallStreet Bets board, where calls to buy GameStop and AMC were born, rallied behind Revlon, speculating that it was the next great meme stock to invest in.
A Reddit user named Electronic Ad6420 advised others, “If you had money that you would burn doing something, yes, you should buy some.” [Revlon]†
Another user by the name of Innocentgli urged others to keep the stock high, using the former GameStop investor’s motto, “to the moon.”
‘Let’s push rev to the moon!! $12 and up,” they wrote.
Seeing the buzz about the stock, another user with the handle WonderWoman009 asked the obvious, “Is Revlon the Gamestop of 2022?”
Many on the WallStreet Bets subreddit called on others to invest in the ‘GameStop of 2022’
Analysts speculate that the makeup company could see a turnaround due to the stock swing
The similarities with GameStop are apparent after the hurting video game retailer’s shares plummeted last year amid Wall Street investors who shorted the shares, betting on its continued demise and forecast bankruptcy.
However, the bets were thrown off the track by a wave of individual investors who came to the rescue of the company, fueled by the Reddit boards, sending the stock soaring to unprecedented heights.
The stock hit nearly $500 a share during the frenzy and just two days after Tesla CEO Elon Musk tweeted “Gamestonk” on Jan. 27.
The chaos that swept Wall Street into a frenzy, and even investor apps like Robinhood quickly dissuaded people from buying GameStop stock.
The move caused waves online as more people tried to invest in these “meme stocks,” including AMC, Bed Bath & Beyond, and Beyond Meat.
Market analyst Vanda Research said Revlon was a “perfect candidate” for the meme stock category and could see similar success to Hertz Global Inc’s recovery. Holdings in 2020.
Like Revlon, the rental car company had suffered a drop in stock value, leading to a bankruptcy filing in May 2020, but a surprise surge the next day allowed the company to regain all of its lost value in just a few weeks.
GameStop, a store that supplies computer games and accessories, struggled late last year until individual investors rallied en masse to support the company.
The rise in meme stocks saw the company hit historic highs on Wall Street