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Updated with Nasdaq noncompliance notice, final volume and price moves.)
EVERETT, Wash. (
Frontier Financial(FTBK) shares on Tuesday surged as much as 79% on trading volume that was more than 50 times its daily average in the absence of any company-specific news.
Shares of the commercial bank holding company finished higher by 36 cents, or 30.5%, to $1.54, after rising as high as $2.12 in intraday trading. More than 25 million shares changed hands by Tuesday's close, compared to its 50-day average daily volume of 515,167, according to the
Nasdaq's Web site.
Tuesday's gains built on a sharp rally Monday in Frontier Financial, when the stock jumped 53.2% to the first close above the $1 mark in nearly three months. Frontier Financial has now climbed to over a four-month high and has also re-crossed its 200-day moving average, according to
Tuesday afternoon, Frontier disclosed it had received a delisting notice from the Nasdaq on Sept. 15, warning that the company's stock had traded below $1 a share for 30 consecutive business days. The notification letter stated that Frontier has until March 15 to regain compliance with the minimum bid price rule.
Despite the Nasdaq's notice, it's not exactly clear what has moved Frontier Financial's shares over the last two sessions. Chatter suggested the stock was in the midst of a short-covering rally, as Frontier sported a short interest float of 14.9% as of Aug. 26, according to Yahoo! Finance. Investor posts on Internet message boards shared the sentiment of a massive short squeeze.
The surge comes shortly before a deal that will see
SP Acquisition Holdings, a New York-based asset-acquisition company, buy Frontier for about $24 million in stock and warrants. The merger is expected to close in the fourth quarter, the companies said in July. SP Acquisition shareholders will vote on the Frontier deal on Oct. 8.
-- Written by Robert Holmes in New York.