Champagne Stock

Champagne stocks are those that have seen a big increase in value, typically doubling or tripling (or more!), in a short period. Why is it called a champagne stock? That's open to some interpretation. Is it because you're celebrating that it has gone up so fast? Or is it a sign that the stock has gotten...bubbly?

Example? Okay, you talked us into it...Picture it: American Airlines, 2013. The company was skidding toward oblivion, already filing for bankruptcy. But wait! A savior comes! American is pulled out by the announcement that it would merge with rival U.S. Airways. American Airline shareholders would get 3.5% of the combined company.

Boom! The stock went from less than $1 in 2012 to a price around $12 a share. That's not a super expensive stock price, but it represents a huge jump from the sub-buck realm. It's even more champagne-celebration worthy when you consider that typically the owners of stock in bankrupt companies end up getting no payout.