Morgan Stanley makes big bet on meme-stock Revlon

Revlon products are for sale at a store in Manhattan, New York, U.S., June 29, 2022. REUTERS/Andrew Kelly//File Photo

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NEW YORK, Aug 15 (Reuters) – Shares of bankrupt cosmetics company Revlon Inc (REV.N) soared nearly 27% on Monday after asset manager Morgan Stanley (MS.N) disclosed in a record that he had purchased 400,650 shares of the company over the past quarter.

The purchase increased Morgan Stanley’s stake by about 1,793%, according to its filing, known as 13-f.

Shares of Revlon are up 582% from their mid-June low, boosted by hopes the company can replicate the success of car rental company Hertz (HTZ.O) shareholders, who have were generously rewarded when Hertz was rescued from bankruptcy by a group of investors. Read more

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Revlon’s rebound was accompanied by rallies in other so-called meme stocks popular with retail investors such as AMC Entertainment Holdings Inc (AMC.N) and GameStop Corp (GME.N), which were hit hard in the first half of the year.

Revlon filed for Chapter 11 bankruptcy in June after saying its high debt load left it too cash-poor to make timely payments to suppliers. The company received approval for a $1.4 billion bankruptcy loan on August 1 despite objections from its official creditors’ committee, which called the company a “mess” in a court filing. Read more

Despite the recent rally, Revlon shares are down 30% year-to-date.

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Reporting by David Randall; Editing by Leslie Adler

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