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The smell of burnt fingers seeped through the City today as Yell's short-sellers watched its shares rocket.
In a bear squeeze, the Yellow Pages owner, which is one of the most heavily shorted stocks in the FTSE 250, shot up 4½p - almost a fifth - to 27¼p after it delivered less disastrous figures than of late.
The debt-laden directories group, which warned of a collapse in profits at the end of May, said talks with its banks to refinance debts are on track as it posted first-quarter sales that were slightly ahead of earlier guidance.
Chief financial officer John Davis said discussions with its lenders - led by HSBC - are in their early stages but the company hopes to complete them by the autumn.
Yell holds its annual shareholder meeting tomorrow, and will be forced to ask its long-suffering investors to grant it a waiver over debts.
The board is also likely to face their wrath over the generous pay and bonus packages handed to its bosses.
First-quarter revenues were cushioned by the weak pound but, taking out the effects of currency movements, they were down 10.4% as small businesses - its main customers - curbed their advertising spending in the recession.
Yell also operates in three of the hardest hit economies around the world - the US, Spain and Britain. Its shares have almost halved in value since the start of the year.
It has shrunk its debt mountain by £400 million to £3.8 billion in the three months, but this remains more than 20 times its market capitalisation of just £178.8 million.
The company, spun out of BT in 2001, racked up the debts through overseas acquisitions.
Analysts were quick to caution against buying into the rally, with Numis, which is advising clients to dump the stock, warning: "Yell's balance sheet remains a serious risk to equity shareholders."
House broker UBS said that the shares could be worth between "0p and 80p" depending on how the restructuring plays out.
London shares continued their winning streak for a ninth day with the FTSE 100 clawing its way above the 4500 mark. The benchmark rose 47.86 points to 4541.59.
The rally, the index's longest since the end of 2003, has added more than £90billion to the value of the top flight.
New York followed London's lead, with the Dow Jones climbing 45.49 points to 8926.75.
Citigroup fuelled optimism after announcing that the end of the global earnings recession is in sight. The heavy-hitting broker said even a sluggish return to growth could be sufficient to drive a sharp rebound in company's profits.
It reckons that a combination of climbing profits and dirt-cheap valuations will push up share prices in the second half of this year.
"Analysts are putting through more global earnings upgrades than downgrades for the first time since 2007," said Robert Buckland, the bank's well-regarded global equity strategist.
"Financial conditions and economic expectations are also improving. It all suggests we could be approaching the end of the global earnings recession."
Water stocks were the main drag on the index as industry watchdog Ofwat's calls for lower bills sparked a sell-off of shares in the sector.
The regulator threw out Thames Water's plans to raise bills by 17% in the next five years, saying that they could increase the average bill by just £1 in the period - below inflation.
Severn Trent claimed the wooden spoon, 89p cheaper at 1024p, United Utilities dropped 28p to 474½p and Pennon Group was off 14¾p at 492¾p.
But mining shares rallied after yesterday's sell-off, claiming the top five places on the Footsie winners' board despite metal prices continuing their retreat.
Fresnillo, the Mexican silver miner, jumped 36½p to 626½p to take the top spot, Eurasian Natural Resources was 46p stronger at 836p and Kazakhmys added 34p to 774½.
AIM tiddler Norseman Gold added 2p to 38p after enjoying a record quarter for gold production. Its shares started the year at just 1.75p.
International Personal Finance was one of the biggest winners despite the emerging-markets lender posting a 65% plunge in first-half profits.
IPF, which offers loans in central Europe, Romania and Mexico, issued a profits warning in May as its customers struggled to repay their loans.
But it said it has seen a strong recovery in the second quarter and its figures smashed forecasts.
WH Ireland is advising snapping up the shares, which today surged 31¼p to 111p.
