Joann (NASDAQ:JOAN) stock is rocketing higher on Monday after the arts and crafts supply store announced a Chapter 11 bankruptcy filing.
This bankruptcy filing is part of an agreement with lenders that will enable a restructuring of the business. This has the company expecting to end the bankruptcy period soon with its current target being late April 2024.
The agreement with lenders also comes with $132 million in new financing for Joann. It will likewise see the company retire $505 million of its current debt. It will continue to operate normally throughout this process.
Chris DiTullio, Chief Customer Officer and co-lead of the Interim Office of the CEO said this about the bankruptcy filing:
“We are excited by our progress on both top and bottom-line initiatives in the past year and are confident the steps we are taking will allow JOANN to drive long-term growth. We appreciate the support from our financial and industry stakeholders in this agreement, and their confidence in our ability to continue driving positive business change.”
What This Means for JOAN Stock
Joann is expecting to emerge from the bankruptcy process as a private company owned by lenders and affiliates. As a result, the company’s shares will no longer trade on the Nasdaq Exchange and won’t be listed on any other exchange.
JOAN stock is up 14.8% as of Monday morning, with more than 2.7 million shares traded. Its daily average trading volume is below that at about 343,000 shares.
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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.
