Shares of luxury exhibitor iPic, which operates 16 theaters in nine states including New York and California, jumped 19% on Friday on 10 times their normal trading volume.
The rally isn’t likely to last, though, as word came Thursday from the SEC that the bankrupt company’s stock is set to be delisted next week from the Nasdaq. The decision to delist stemmed directly from Monday’s filing by the company for Chapter 11 bankruptcy protection.
The buy-in on Friday boosted the share price to 67 cents. The influx could signal that opportunists hoping to either build an equity position at cheap prices despite the Chapter 11 process, or are hoping to book short-term profit on Monday or Tuesday before the curtain falls.
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One twist to the company’s bankruptcy saga is the role played by Retirement Systems of Alabama, a fund for teachers and state employees that has branched out into investments beyond state lines. According to Bloomberg, the fund owns 40% of iPic’s Class A shares and agreed to provide a $16 million loan to the exhibitor to keep its operations going. The arrangement makes $12 million immediately available and places the fund at the head of the line of creditors.
An initial public offering was held for iPic in February 2018 and the stock closed its first day at $14.80. Since then, the company has faced stiffer competition as many rivals have rolled out luxury seating and amenities that used to be more particular to iPic. As a circuit, the company has also stood out by being willing to book Netflix films day-and-date with their streaming debuts.
Pending an appeal of the Nasdaq decision to delist, trading will be suspended on Wednesday. According to Thursday’s SEC filing, the company got a warning on May 15 that it did not meet the $35 million minimum market value of listed securities. While that warning stipulated that an improvement needed to be made in 180 days, the Chapter 11 filing forced the market to act more quickly.
The company did not respond to Deadline’s request for comment.
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