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NEW YORK (Reuters) – Shares of bankrupt cosmetics company Revlon Inc soared nearly 27% on Monday after asset manager Morgan Stanley (NYSE:MS) revealed in a filing that it purchased 400,650 shares in the company over the last quarter.
The purchase increased Morgan Stanley’s stake by approximately 1,793%, according to its filing, known as a 13-f.
Shares of Revlon are up 582% from their mid-June low, boosted by hopes the company can replicate the success of shareholders in car-rental company Hertz, who were handsomely rewarded when Hertz was rescued from bankruptcy by a group of investors.
Revlon’s rebound has come alongside rallies in other so-called meme stocks popular with retail investors such as AMC Entertainment (NYSE:AMC) Holdings Inc and GameStop Corp (NYSE:GME), which were hit hard in the first half of the year.
Revlon filed for Chapter 11 bankruptcy in June after saying that its high debt load left it too cash-poor to make timely payments to vendors. The company received approval for a $1.4 billion bankruptcy loan on Aug. 1 despite objections from its official creditors committee, which called the company a “mess” in a court filing.
Despite the recent rally, Revlon’s shares are down 30% for the year-to-date.
