Shares of Redbox Entertainment Inc. were surging toward their best day on record Monday, though it wasn’t immediately clear what was driving the stock move.
The shares were soaring 87% in afternoon trading, and was up as much as 116% earlier. The stock was on track to surpass its largest single-day percentage gain of 69.4%, which was achieved April 29, 2022.
On the surface, Redbox’s
RDBX,
Monday spike would seem highly unusual since the company, which operates DVD rental kiosks, agreed in May to be acquired by Chicken Soup for the Soul Entertainment Inc.
CSSE,
in an all-stock deal that would give Redbox shareholders 0.087 shares of video-content company Chicken Soup. With Chicken Soup shares up nearly 5% Monday to a recent $9.60, the deal values Redbox at 84 cents a share.
Through the deal, Chicken Soup assumes Redbox’s debt, which was more than $300 million as of the end of March.
Redbox’s Monday pop becomes only slightly less unusual in light of the stock’s trading patterns since the deal announcement, which may be at least partly driven by heightened interest among retail investors. Redbox shares have been making volatile swings in the past few months and closed as high as $15.27 on June 13, a day when Chicken Soup shares finished at $7.69.
Shares of Redbox have pulled back sharply from their June highs, and closed Friday at two-month low of $3.05.
See also: Redbox ‘should no longer be valued on its own merit,’ analyst says in downgrade
Representatives for Chicken Soup for the Soul and Redbox declined to comment on Monday’s stock action
Redbox came public through a merger with a special-purpose acquisition company (SPAC) merger last fall.
A Redbox shareholder vote on the Chicken Soup deal is scheduled to take place Aug. 9.
Source: https://www.marketwatch.com/story/redbox-stock-shoots-toward-best-day-on-record-11658764105?siteid=yhoof2&yptr=yahoo