Explaining the options market activity driving the 'reddit rockets'
The latest nostalgia stock to jump on the Reddit rally is BB Liquidating Inc., the final remnant of bankrupt video-rental company Blockbuster.
The penny stock surged as much as 302 per cent Wednesday, adding to Tuesday’s 774 per cent spike, on volume that was 70 times the three-month average, showing that even the most retrograde of old-technology stocks isn’t immune to the ebullience of retail investors and day traders.
Blockbuster filed for bankruptcy in 2010 as competitors like Netflix Inc. eliminated the need for bricks-and-mortar video-rental stores. Only one Blockbuster store survives, in Bend, Oregon.
While equity owners typically are left with nothing in a bankruptcy, investors have flocked to such stocks before: Hertz Global Holdings Inc. soared last year after filing for Chapter 11, prompting the company to warn new investors they were all but certain to be wiped out.