Financier Ronald Burkle is backing away from the embattled American Apparel Inc.
Burkle sold off 909,500 shares of American Apparel for $1.4 million this month, leaving him with 3.4 million shares, or 4.3 percent of those outstanding, according to a filing with the Securities and Exchange Commission Tuesday.
The investor paid $5.9 million for a 6 percent stake in the company in June.
So far, Burkle’s managed to make a return on his investment — having paid an average price of $1.38 a share to build the stake and selling shares at an average price of $1.55. Based on those averages, his profit on the shares just sold would be just under $155,000.
But if the plan is to cash out entirely, Burkle has to wait for the stock to rise again if he doesn’t want to wind up in the red.
American Apparel’s stock has been a roller coaster lately, gaining 16 percent to $1.16 Tuesday after falling 22.5 percent Monday.
Although big percentage swings are more common for stocks with lower prices, the number of shares trading hands shows the company’s suddenly drawn the interest of investors. Four million shares of the firm were sold Tuesday, and more than 6 million traded hands the day before. Typically, American Apparel stock sees volume of less than 700,000.