Shares of the cosmetics giant Revlon Inc. shot up 18 percent since Tuesday, with the stock seeing it’s best three-day stretch in Wall Street since filing for bankruptcy last week.
By closing time Thursday, the stock was up $7.20 per share, a 269 percent increase over the last week, which came after individual investors gave the company a surge in what appears to be the latest meme stock phenomenon.
More than 186 million shares were traded on Tuesday, the most in the company’s history, with another 175 million trades on Wednesday, mostly coming from individual traders, the Wall Street Journal reported.
Bets on the future of the company were at an all time high this year as more than 210,000 contracts were traded on Wednesday, with the most popular option looking for shares to rise another $10.
The outpour of support and trading for the popular makeup company is reminiscent of when investors game out in droves to support GameStop against Wall Street investors betting on the company’s downfall.
By closing time Thursday, Revlon stock was up $7.20 per share, a 269 percent increase over the last week following a bankruptcy filing
The outpour of support appears to be another example of the meme stock phenomenon, with thousands of bets placed that the stock will go up another $10
The makeup giant had been seeing its stock plunge this year, hitting a low of $1.17 last week
Revlon’s stocks hit their lowest point on June 13, worth only $1.17 a share, as speculation grew that the cosmetic giant would file for bankruptcy, which it did two days later.
‘Consumer Consumer demand for our products remains strong – people love our brands, and we continue to 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 issues in order to meet this demand.’
After filing for Chapter 11 bankruptcy last Wednesday, the stock nearly doubled by the end of the following day, and continued to shoot up 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 and speculated that it was the next great meme stock to invest in.
One Reddit user with the handle name Electronic Ad6420 advised others, ‘If you had money you were just gonna burn for something to do, then yes, you should buy some [Revlon].’
Another user with the name Innocentgli egged on others to keep the stock soaring, using the former GameStop investor motto, ‘to the moon.’
‘Let’s push rev to the moon!! $12 & 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 sub-reddit called on others to invest in the ‘GameStop of 2022’
Analyst speculate that the makeup company could see a turn around due to the stock surge
The similarities with GameStop are apparent after the hurting video game retailer’s stock was set to plunge last year amid Wall Street investors shorting the stock, betting on its continued downfall and predicted bankruptcy.
The bets, however, were thrown off by a surge of individual investors who came to the company’s rescue, fueled by the Reddit boards, sending the stock soaring to unprecedented heights.
The stock was close to hitting $500 per share during the frenzy and just two days after Tesla CEO Elon Musk tweeted ‘Gamestonk’ on January 27.
The chaos through Wall Street into a frenzy, and even investor apps like Robinhood quickly prevented people from buying GameStop stock.
The move created waves online as more sought to invest in these ‘meme stocks,’ including AMC, Bed Bath & Beyond and Beyond Meat.
Market analyst firm Vanda Research said Revlon was a ‘perfect candidate’ for the meme stock category and could see a similar success to Hertz Global Inc. Holdings’ 2020 recovery.
Like Revlon, the car rental company had suffered dipping stock value leading to a bankruptcy filing in May 2020, but a surprise surge the following day allowed the company to recover all its lost value in just a few weeks.
GameStop, a store supplying computer games and accessories, was struggling at the end of last year until individual investors came out in droves to support the company
The meme stock surge caused the company to hit historic heights in Wall Street