Shares in Revlon (NYSE:REV) have rocketed since the cosmetics company filed for bankruptcy - becoming the latest ‘meme’ stock craze among retail investors.
The stock has surged over 350% since the bankruptcy announcement on 16 June.
READ: Cosmetics giant Revlon (NYSE:REV) files for bankruptcy
According to MarketWatch, Revlon (NYSE:REV)’s heavily shorted shares have attracted a retail trading crowd.
Analysts at Vanda Research said Revlon (NYSE:REV)’s short interest jumped last week to 37.6% of the shares available for trading. That made it a ‘meme’ stock and a “perfect candidate” for the most speculative retail crowd, according to Vanda.
“A spike in social boards chatter and OTM [out-of-the-money] call option volumes over the past week confirm that retail crowds are behind the latest moves higher,” Vanda analysts wrote in a weekly note to clients.
The jump in Revlon's stock is similar to what happened to rental car company Hertz after it filed for bankruptcy in 2020. Positive comments from traders on news forum Reddit, who were betting against short sellers that believed Hertz stock would fall, led to an initial surge in the share price.