(Bloomberg) Redbox Entertainment traded at around $16.37 after jumping more than 23% on Monday in speculative market trading.
Redbox stock has been on retail traders’ radar, with elevated trading volume. The stock’s trading volume reached 42.2 million shares as of last week’s Friday intraday, compared to a daily average volume of 17.8 million shares.
No concrete news has been fueling the surge in Redbox Entertainment. However, the company filed a merger deal with Chicken Soup at a significant discount of $0.69 per share.
Chicken Soup CEO explained the magical $0.69 per share discount acquisition of Redbox. He pointed out they are bringing assets that are helpful in terms of the debt. These include a clean-up of the capital structure and access to new financing.
At the current level, Redbox is trading at a substantial premium to the merger value. The stock is also trading significantly higher compared to its debut at $10 per share.
A possible explanation is that investors could be expecting the deal to fall apart and the stock to prove to be of great value before the market realizes.
With Redbox’s shareholders having approved the merger deal, the odds of its falling apart are reportedly low. For now, Redbox remains on top of the retail frenzy with no significant fundamentals driving it.
RDBX:NASDAQ is up +23.65%.
