I just recently read an article that discussed this phenomenon. Took me forever to dig it up: http://www.bloomberg.com/apps/news?pid=20601057&sid=anOM5QMuepzA

I just recently read an article that discussed this phenomenon. Took me forever to dig it up: http://www.bloomberg.com/apps/news?pid=20601057&sid=anOM5QMuepzA http://www.bloomberg.com/apps/news?pid=20601057&sid=anOM... in summary, many stocks go up after declaring bankruptcy, and it's probably due to short-covering. Edit: but then the next question is, why cover your short-sell at all if we know it is going to 0 eventually? It may be that they are trying to release their money tied up in 'margin' http://www.investopedia.com/ask/answers/05/shortmarginrequirements.asp http://www.investopedia.com/ask/answers/05/shortmarginrequir...