Mainstream media has time and again taken a dig at the parabolic returns experienced by the cryptocurrency market.

But the stock market is seeing something that even the crypto market hasn’t seen.

Car rental company Hertz enjoyed a 1400% increase in its share prices declaring bankruptcy.

$10,000 invested in Hertz the day after it filed for bankruptcy is now worth about $125,000

— Hipster (@Hipster_Trader) June 8, 2020

“I’ve been trading for 7 years and I’ve never seen this stock market behave like any other market before. Even the Altcoin run of 2017, markets were over-reactive and bad news would still dump a coin,” said trader Altcoin Psycho. “This is just madness.”

This has been while the likes of Goldman Sachs compares the returns of Bitcoin and Ether with that of “Tulipmania” and equity bubbles in the Nasdaq and stating “cryptocurrencies moved beyond bubble levels in financial markets.”

As such, Goldman Sachs concluded in its client call from just a couple of weeks back, that they “do not recommend bitcoin on a strategic or tactical basis for clients’ investment portfolios even though its volatility might lend itself to momentum-oriented traders.”

They do not recommend gold either because the bullion doesn't offer reliable downside protection and its correlation with inflation is also “very unstable.”

It wasn’t only Hertz Global Holdings Inc., that experienced such an increase, retailer J.C. Penney’s stocks have jumped 167% since May 15 and oil driller Whiting Petroleum is up 835% since April 1, are among those that have seen their shares more than double. This has been despite being in Chapter 11 bankruptcy, a process allowing companies to keep operating while working on a plan to repay creditors.

Pier 1 Imports also more than doubled but is still down 97% since filing for bankruptcy on Feb. 17. Those that have begun planning or bankruptcy like Chesapeake Energy and GNC Holdings also recorded an increase of 182% and 106% respectively on Monday.

Tesla competitor Nikola Motors with zero revenue also surging over 100% is yet another indication of market exuberance.

The game isn't over yet. If Icahn and Buffett are selling, they have a good reason. They don't watch the Fed or Covid, they look at the underlying value.

— Mati Greenspan (tweets are not trading advice) (@MatiGreenspan) June 8, 2020

Retail investors don't know where to put their money and are buying big names that they recognize or have low prices. But what they aren’t realizing is that they are wagering against a court process where shareholders rarely get anything back.

Under US bankruptcy law, shareholders are the last in line, after lawyers, lenders, and vendors, to get any kind of payout.

This rally in bankrupt shares could be the result of short covering where traders who have bet against a company close their positions by re-buying shares which lifts prices and also fueled by amateur traders using platforms like Robinhood who are currently bored in lockdown and looking for quick money, reported Bloomberg.

“I’ve seen a lot of unusual micro-bubbles over the years. Cannabis. Blockchain. Fuel cells. Space. Electric cars. Etc. But I don’t think I’d have ever guessed before that *bankruptcy* itself would be an exciting investment theme,” tweeted Joe Weisenthal from BloombergTV.

Yea forsure, I think this used to be more of a theory but 2020 has proven this to absolutely be a fact

— Altcoin Psycho (@AltcoinPsycho) June 9, 2020

Interestingly, over the last 10 weeks, not a single S&P 500 stock has been down while the economy is struggling with the coronavirus pandemic, nearly 20% unemployment rate, and riots across the US.

The Bitcoin and crypto market, on the other hand, have been holding steady for the last few weeks.

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