Party City filed for Chapter 11 bankruptcy relief
Party City Holdco Inc (NYSE:PRTY) filed for Chapter 11 bankruptcy relief on Tuesday, in an effort to combat slowing sales stemming from high inflation and higher operating costs.
The party supply retailer reported $1 billion to $10 billion in both estimated assets and liabilities, and said it acquired $150 million in debtor-in-possession financing. Today's news follows months of slowing sales and store closures, alongside helium scarcity and general inventory shortages.
With the protection plan in place, PRTY was 10.6% higher at 41 cents per share, ahead of the session's open. However, trading was halted before the market kicked off trading for the day.
Party City stock first fell into penny stock territory in 2019, and now sports a 93.1% year-over-year deficit. On Jan. 6, the equity hit an all-time low of 15 cents, following a Wall Street Journal report that said the company could file bankruptcy within weeks. Since early November, the 30-day moving average has pressured the shares lower.
PRTY is on the short sale restricted (SSR) list today, but longer term, short sellers have been building their positions. Short interest is up 14% in the most recent reporting period, and the 15.11 million shares sold short make up 13.7% of the stock's available float.