Revlon stock jumps over 100% despite likelihood of bankruptcy (NYSE:REV)
Despite reports of impending bankruptcy for famed cosmetics retailer, Revlon (NYSE: REV) shares soared on Tuesday.
In a counterintuitive jump, shares of Revlon Inc. (REV +41.9%) surged in the first half on Tuesday trading, resulting in a brief interruption only about 30 minutes into the session. At the high of the session, shares reached $3.15.
The move was particularly surprising as the company is expected to file for Chapter 11 protection by the end of the week, according to the the wall street journal. Shares had fallen more than 70% since that report was released on Friday afternoon through Monday’s market close. At this time, no notice of such action has been filed with the Securities and Exchange Commission.
It should be noted that the stock is heavily short, with 38.44% of its total float held short, creating the conditions for a last-minute squeeze. Trading volume also climbed to 57 million on Tuesday from a paltry average volume of just 34.6 thousand.
In the final hours of trading on Tuesday, the gain quickly faded. Indeed, in the past two hours of trading, the stock has gone from a triple-digit gain to a still-impressive rise of around 60%.
Learn more about expectations for a bankruptcy filing by the end of the week.