The Globe And Mail

Grexit and the mysterious case of the near doubling of Fortress Paper shares
The Globe And Mail

A mysterious spike in the shares of a small Canadian pulp and paper stock is rumoured to foretell an exit of Greece from the euro zone.

Fortress Paper’s stock has taken off in recent days despite the lack of any material catalyst, aside from speculation the company is positioned for a deal to print new Greek banknotes.

Greece would only require such a service, of course, were it to withdraw or be expelled from the European Economic and Monetary Union, a fate the country may yet avoid. Linking the stock’s near-doubling to the potential return of the drachma is pure conjecture, but it’s gotten some attention in the absence of any major improvement in Fortress’s operations, its financials or the market it serves.

A portion of the surge in share price may be explained by modest improvements in the woeful global market for dissolving pulp, Fortress’s core line of business. But this is not the first time a spike in Fortress’s trading activity coincided with an escalation of the Greek debt crisis.

Some economists have called for Greece to introduce a parallel currency or return to the drachma should it default on its debt and/or leave the currency union. Its tenuous financial position doesn’t preclude either outcome.

Which is where Fortress Paper could, conceivably, come in.

Le titre boursier de Fortress Paper, une compagnie implantée au Québec, explose en ce moment en bourse parce que si la Grèce fait faillite, elle devra imprimer de l’argent sur du papier produit par cette compagnie !

Avec le niveau d’endettement des gouvernements à travers le monde, j’aurais presque envie de dire que l’industries des pâtes et papiers a un bel avenir devant elle !