Orion Stock Up 44% for Day’s Biggest Gain

Financially troubled Orion Pictures Corp. was the big winner Tuesday on the New York Stock Exchange. Its stock rose $1.375 a share, closing at $4.50--a 44% rise that made it the day’s biggest percentage gainer.

Some of the company’s junk bonds also soared. Its 10% bonds maturing in 1994 jumped $52.50 to $262.50 per $1,000 face value.

After the market closed, however, Orion rained on its own parade by announcing that it expects substantial second-quarter losses.

In a formal statement, the New York-based company said its quarterly filing with the Securities and Exchange Commission will be delayed because of the restructuring effort.

Analysts speculated that traders were covering short positions in the stock in response to the leaking of a confidential restructuring plan for the company. “Short-covering” occurs when traders who sold borrowed shares on a bet that the stock would fall rush in to buy shares and repay their stock loans.

Lisbeth R. Barron, an entertainment analyst with S.G. Warburg Securities in New York, said the price surge created by “panic short-covering” should be reversed by loss projections.

Orion--which is seeking approval for a restructuring plan that would give bondholders a 70% stake in the company--declined comment on the stock activity. Company officials have also refused to respond to speculation that a foreign buyer may be interested in Orion, which enjoyed its greatest success in the past year with the release of “Dances With Wolves.”

In a report prepared Tuesday, Barron said a buyout is possible but unlikely, since Orion’s debt exceeds its value. Barron put the actual value of Orion’s stock at 35 cents a share.

The stock has fluctuated wildly this year, moving from a high of $14.25 a share to a low of $1.375 a share.