“TWOU Stock Soars 112% After Bankruptcy Filing: Short Squeeze or Investor Optimism?”
2U (NASDAQ:TWOU) stock experienced a remarkable 112% increase in value at the beginning of the week, shortly after announcing its Chapter 11 bankruptcy filing. Despite owing over $1 billion in debt, 2U managed to secure a deal with lenders to reduce its debt by 50% and receive an additional $110 million in capital. CEO Paul Lalljie remains optimistic about the company’s future and expects to emerge from bankruptcy by the end of September.
Following the bankruptcy announcement, TWOU shares plummeted by over 60%, leading to speculation that the recent surge in stock value could be attributed to investors buying back shares after the significant drop. However, some believe that the jump may be a result of a coordinated short squeeze effort, where investors target a bearishly perceived stock to force short sellers to cover their positions, causing the stock price to rise further.
Fintel data indicates that only 0.34% of 2U’s float is being sold short, but this figure may have changed since the bankruptcy filing. With a relatively small float of 2.7 million shares, 2U is more susceptible to volatile trading. The exact reason behind the stock’s sudden increase remains unclear, but loyalists of 2U are likely pleased with the recent developments.
In conclusion, the surge in TWOU stock value can be attributed to a combination of factors, including investor optimism following the bankruptcy filing and the possibility of a short squeeze. It is essential for investors to closely monitor the situation and understand the risks involved in trading low-volume stocks like 2U.