By Alessandro Albano
Investing.com – Like the best meme stocks, stock Revlon Inc. (NYSE 🙂 The company has won 250% of the last five Wall Street sessions despite filing for bankruptcy.
One week ago, the American cosmetics company filed a petition for bankruptcy protection in Chapter 11 of the Southern District of New York, ending a story that began with the Great Depression of 29, due to the high debt accumulated in recent years (especially during epidemics). .
The company had more than $ 3.7 billion in debt due to the supply chain crisis, rising inflation and epidemics and falling sales caused by increased competition, according to a document filed with U.S. officials.
Debt, which includes loans maturing in 2024 and with 6.25% interest, increased in 2016 after Revlon issued more than $ 2 billion in loans and securities in support of the acquisition of Canadian company Elizabeth Orton Cosmetics.
Chapter 11, Agreement with Restructuring Plan and Debt Repayment Allows Continuing Operations. Therefore, Reliance Industries (NS 🙂 would be interested in acquiring the historic American company. Reliance is India’s largest private company, with revenue of about $ 20 billion by 2021.
The stock, which fell $ 1.17 after the bankruptcy, rose to $ 8.15 after the Indian Group’s interest announcement, recovering 800% of its all-time low. Since the beginning of the year, when it traded at $ 11.5, the action lost another 30%.
Many have justified the rise, citing the acquisition of Reliance in January 2021, when a wave of small retail investors began to buy companies affected by poor infrastructure and short hedge financing. Gamestop Corp. (NYSE 🙂 and AMC Entertainment Holdings Inc. (NYSE :).