Shares of Party City (NYSE:PRTY) have been extremely volatile the past week as the retailer nears a Chapter 11 bankruptcy filing. Bloomberg reports the company is currently holding talks with a group of creditors, like Capital Group Cos Inc. and Silver Point Capital, ahead of a possible bankruptcy filing. Due to the creditor’s ownership of first-lien debt, they could possibly take over the company if Party City decides to enact a debt-for-equity swap.
The past year has been anything but pleasant for Party City. As its namesake implies, the company sells party products, although demand has been heavily suppressed. On top of that, higher shipping costs, lower consumer sentiment, inflation and a shortage of helium have shrank sales significantly.
In the meantime, the company has hired Moelis & Co., AlixPartners and Paul Weiss Rifkind Wharton & Garrison to explore strategic options such as a capital raise. In addition, it has a coupon payment due next month that will likely not be paid out. Its 8.75% first-lien notes due 2026 are also trading at a large discount. As of the third quarter, Party City had $92 million of cash through its asset-based credit lines and $1.8 billion of debt.
With that in mind, let’s take a look at the investors betting big on PRTY stock.
5 Investors Betting Big on PRTY Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q3, 120 13F filers reported owning PRTY, an increase of six filers from the prior quarter. Meanwhile, the institutional put/call ratio sits at 0.37, up from 0.19. That’s equivalent to 1.13 million puts and 3.06 million calls, implying a bullish options stance. With a bankruptcy filing on the line, here are the top investors of PRTY:
- CAS Investment Partners: 19.56 million shares. CAS’s position remained unchanged during Q3, although it reported purchasing 2.75 million shares in an April filing.
- BlackRock (NYSE:BLK): 7.21 million shares. BlackRock sold 82,782 shares during Q3.
- Vanguard: 6.03 million shares. Vanguard purchased 469,931 shares during Q3.
- CastleKnight Management: 4.53 million shares. CastleKnight sold 310,543 shares during Q3.
- JP Morgan Chase (NYSE:JPM): 3.56 million shares. JP Morgan purchased 1,328 shares during Q3.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
