What happened
Shares of Michaels (MIK) rose 88% in April 2020, according to data from S&P Global Market Intelligence. All told, the arts and crafts retailer has seen its share prices triple from the all-time lows it recorded in mid-March. The company had no substantial news to share until the very end of April, where Michaels announced a contactless package pickup partnership with UPS (UPS 2.42%).
So what
The UPS collaboration allows Michaels customers to order items for pickup at a nearby UPS Store; the shipping service will also accept returns at the store, and the shopper never needs to enter the physical store.
Anything that helps Michaels execute business transactions during the COVID-19 pandemic has to be seen as a positive move. Other than that, Michaels stock rose on an increasingly optimistic view of the retail industry in this global health crisis.
What's next? Image source: Getty Images.
Now what
Some might look at Michaels' quick rebound and call it a "dead cat bounce." The stock is trading 63% lower in 2020 even though it tripled in six weeks. I thought that Michaels looked like an affordable turnaround play in February because the company appeared to have found ways to stay relevant despite an onslaught of e-commerce rivals, but I underestimated the coronavirus issue at the time.
This volatile stock is best watched from the sidelines. Any investment in Michaels -- whether you're buying the stock or selling it short -- is a risky gamble at this point.
