Shares of beauty-products maker Revlon Inc. have more than doubled since it won court approval to take out $1.4 billion in financing to carry itself through bankruptcy, WSJ Pro Bankruptcy reported. Revlon stock reached $10.74 a share in early trading yesterday before closing at $8.89, indicating market faith that the company’s equity still has value despite its latest borrowing. Shareholders typically walk away empty-handed in bankruptcies, but a run-up in Revlon shares after its bankruptcy filing in June has some wondering if it could be the next Hertz Global Holdings Inc., which paid out roughly $1 billion in equity value through its chapter 11 case last year. Tuesday’s rally, which lifted the stock from around $5 last week, followed a decision by Judge David Jones of the U.S. Bankruptcy Court in New York to grant final approval for a loan package designed to keep Revlon afloat while it looks at restructuring options. The rally seemed to ignore that Revlon’s new loan puts additional debt on the company that must be repaid ahead of equity. Revlon watchers said the run-up could reflect positive market sentiment that the restructuring process is moving forward.
