Tesla’s announcement Thursday of its purchase of Riviera Tool LLC sent shares of the supplier’s old penny stock soaring, but it may have been for nothing.
In over-the-counter “pink-sheet” trading, the penny stock for Riviera Tool Co. — the former name of the Grand Rapids, Mich.-based supplier — jumped 10,000 percent from less than a penny to a peak of 60 cents a share, Detroit Free Press reports. The old stock would later close at 22 cents, an increase of 4,400 percent when compared to its worth hours earlier. The OTC trading saw 16 million shares exchange hands after a lull in activity lasting over a month.
However, the shares may not hold much value at all. In 2007, an investment into the supplier by Laurus Master Fund, Ltd. took Riviera Tool off the American Stock Exchange trading floor, though a number of public shares landed in the pink sheet market, where traders buy and sell low-value stocks. Riviera became an LLC once taken off the market, rendering the old shares as little more than keepsakes.
Riviera Tool is responsible for producing stamping parts for Tesla, and will be renamed Tesla Tool & Die by its new owner.
[Photo credit: Windell Oskay/Flickr/CC BY 2.0]
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