Movie Gallery Temporarily Spikes23 Feb, 2006 By: Holly J. Wagner
Movie Gallery shares spiked 17.1% Feb. 22 on rumors that a takeover was afoot or insiders would take the company private, but the 52-cent gain quickly eroded Feb. 23 after analysts deemed it unlikely.
According to Yahoo!, 68% of Gallery's shares are short-traded, meaning investors are gambling that the price will go down.
Wedbush Morgan Securities analyst Michael Pachter called it “a bad rumor” and said the company's $1.1 billion debt load makes it an unlikely takeover target. Movie Gallery is in a quiet period while the company renegotiates the terms of its debt.