Cosmetics maker Revlon officially filed for Chapter 11 last week, but you wouldn’t realize that by just looking at its stock (REV). Despite the bankruptcy, REV has been surging and saw a 138.89 percent increase in the past five days alone.
Revlon stock plunged to $1.17 in the days leading to the bankruptcy filing on June 15th but then started to climb back up in the following days. It surged to $8.14 on Wednesday before settling at $7.52 on Friday.
This jump in value probably has something to do with recent rumors that Revlon might actually avoid bankruptcy. Finance outlet ET Now reported earlier this week that Indian multinational conglomerate Reliance Industries Ltd. is considering making a bid for Revlon. If that turns out to be true, the investment might be worth it. However, industry experts say that the chances of this happening are slim and that investors might end up holding worthless stocks.
Revlon turned to Chapter 11 after the company amassed a substantial debt of around $3.31 billion. This was a result of shrinking sales as well as an array of other problems. It turned out that the company especially suffered from supply issues which caused late product shipments and disrupted its relationship with suppliers and vendors.