- Revlon stock reveresed course on Thursday, slumping lower after a huge rally pushed the stock up 600%.
- Shares of the company were down about 13% Thursday morning.
- The company has a large debt burden of nearly $4 billion.
Revlon stock fell on Thursday, changing course after retail investors drove a massive rally in the week since the cosmetics company filed for bankruptcy.
Shares of the company were trading at $7.06 at 10:57 a.m. ET, down by about 13%.
That’s a reversal for the stock, which has soared in the last week since Revlon said it would file for bankruptcy on June 16. The surge of over 600% was driven by retail traders looking to replicate a short-squeeze of an early pandemic meme stock, Hertz. The car rental company declared bankruptcy in June 2020, with retail investors driving the share price up over 800% on hopes that a reorganization would lead to big gains for the stock.
One post on Reddit’s Wall Street Bets forum made the comparison to the car rental company, pointing out similarities between Revlon’s moves in the last few days and those of Hertz stock in the aftermath of its bankruptcy.
“It is a pretty iconic brand,” one r/wallstreetbets user stated. “Is there a chance it becomes a meme stock?”
According to retail investing tracker VandaTrack, the slowdown comes after $10 million of Revlon stock was purchased in the past week.
Even prior to the bankruptcy filing, Revlon has struggled for years. According to Reuters, sales for the cosmetic brand dipped 22% in 2021 from 2017. The company was also straddled with enormous debt burden, stating in its bankruptcy filing that it currently holds nearly $4 billion in liabilities.