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Revlon stock keeps surging despite filing for bankruptcy

REV stock has surged since its bankruptcy annoucnment, though it is still at just a fraction of its all-time highs.

Revlon stock keeps surging despite filing for bankruptcy
[Source Images: Getty]

Last week, the iconic makeup brand Revlon filed for Chapter 11 bankruptcy. The reasons for the filing were myriad and included mounting debt, increased competition from celebrity-backed beauty brands, supply-chain issues, and the continuing slow death of the American mall.

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Since the beginning of 2022, Revlon stock has crashed. On January 3, the stock was worth $11.66 per share. But on June 16, when Revlon announced it was filing for Chapter 11 bankruptcy, the stock sat at just $1.95 per share.

However, since its bankruptcy filing announcement, Revlon stock has surged. While still well below its January highs, the company’s stock closed at $6.06 a share yesterday—that’s a three-fold increase since the bankruptcy filing announcement, and a 62% surge in the stock price in just one day.

And at the time of this writing, Revlon stock (NYSE: REV) is up another 32% in pre-market trading to over $8 per share.

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So, what’s going on? Why is Revlon stock up almost four-fold since its bankruptcy announcement last week? The consensus seems to be investors think it’s likely Revlon will be acquired by another company due to its relatively low stock price. As Zacks notes, reports suggest that Reliance Industries Limited is interested in a potential takeover. Reliance Industries is an international conglomerate based in Mumbai, India. It has its interests in everything from petrochemicals to retail.

Of course, any potential takeover offer has yet to materialize, and if no offers come up, Revlon stock could reverse the gains it’s achieved this week just as quickly as it made them.

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About the author

Michael Grothaus is a novelist, journalist, and former screenwriter. His debut novel EPIPHANY JONES is out now from Orenda Books. You can read more about him at MichaelGrothaus.com

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