Clothing retailer Express Inc. was the latest company to see its stock skyrocket this week, as Reddit-inspired retail investors continue to pour money into more obscure corners of the market.
Express (EXPR) closed a frenzied trading session at $9.58, an increase of 215 per cent.
Since December, shares of the U.S.-based apparel retailer had consistently traded around the $1 mark, but began to increase late last week. Express closed at $1.17 last Thursday, before climbing to $1.79 by the close Friday. By Monday, shares of the company closed at $4.15. On Wednesday, the stock hit as high as $13.97, an increase of 1,094 per cent compared to last Thursday’s close.
Express is one of several companies that have recently been the target of speculation on WallStreetBets, the forum on Reddit that’s behind the flurry of action seen in companies such as Gamestop (GME) and Blackberry (BB). It has not made significant public announcements in the last week that would have contributed to the sharp rise in stock price. On Jan. 14, Express announced it had entered a definitive loan agreement for $140 million in financing. That day, the company’s stock increased 24 per cent.
More than 279 million shares of Express traded hands by late Wednesday afternoon, still below Monday’s record of more than 358 million. According to Bloomberg News, that volume is about 38 times the amount that changes hands on an average day for Walmart Inc.
While some apparel retailers have managed to weather the coronavirus storm well, Express has been struggling. The company – which sells professional and casual clothing – lost $90.3 million, or $1.39 per diluted share, in its most recent quarter, compared to a loss of $4.1 million, or 5 cents per share, during the same period in 2019. It also cut 10 per cent of its workforce at its Columbus, Ohio corporate headquarters.
According to a report from the Wall Street Journal, Express hired investment bank Lazard Frères & Co. to help it raise enough financing to survive the pandemic. Citing people familiar with the matter, the Journal said the company was “looking to add to its cash reserves to stay afloat until enough of the U.S. population is vaccinated against the coronavirus.”
Bloomberg News reports that short interest in Express stands at about 14 per cent of the free float.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.