Why Is Party City (PRTY) Stock Up 41% Today?

  • Party City (PRTY) stock is on the move as bankruptcy reports spread.
  • The company is reportedly planning to reduce debt and restructure through a bankruptcy filing.
  • This has heavy trading sending PRTY stock higher today.
PRTY Stock - Why Is Party City (PRTY) Stock Up 41% Today?

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Party City (NYSE:PRTY) stock is in the news Monday as investors prepare for the retail company to file for bankruptcy.

While there’s no official filing just yet, several publications have reported on the potential bankruptcy filing. According to insider sources, PRTY wants to negotiate new terms with bondholders to retire old debt and clear the way for future operations.

Adding to that, the insiders say that Party City has brought in AlixPartners as a restructuring advisor. This, alongside the debt negotiations, point toward the company likely using a bankruptcy filing to reorganize its business before coming out of bankruptcy.

What to Watch With PRTY Stock

While a bankruptcy filing would normally cause a stock’s price to plummet, that might not be the case this time around. We’ve been seeing investors pile into stocks of companies closing into bankruptcy lately, such as Bed Bath & Beyond (NASDAQ:BBBY) shares.

That means the same is probably what’s already happening with PRTY stock. If so, it’s possible the company’s shares could see greater gains ahead of that filing. However, that could be followed up by a drop if investors dump shares after the rally.

PRTY stock is seeing heavy trading today with some 37 million shares on the move this morning. For the record, its daily average trading volume is closer to 6.8 million shares.

PRTY stock is up 40.7% as of Monday morning.

Investors looking for more of the latest stock market news will want to check below!

We’ve got all of the most recent stock coverage traders need to know about on Monday! That includes why shares of Mullen Automotive (NASDAQ:MULN), Voyager Therapeutics (NASDAQ:VYGR), and Ocugen (NASDAQ:OCGN) stock are moving today. You can get up to speed on that news at the following links!

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On the date of publication, William White did not have (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.

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