Why did these two ASX stocks surge up to 31% on Thursday - Kalkine Media

October 12, 2023 10:30 PM AEDT | By Team Kalkine Media
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Highlights

  • S&P/ASX 200 closed at 7,091 points, 0.037% higher than the previous day’s close.
  • Redbubble closed 30.43% up, after the company informed that it has returned to positive underlying cash flow in the latest quarter.
  • Lithium Power’s share price zoomed due to rumor of acquisition of the firm by a mining giant.

Australian equity benchmark index, S&P/ASX 200, closed 0.037% up at 7,091 points on 12 October 2023. Seven out of eleven sub-sectors of the ASX ended in the positive territory, while the REIT sector marked the highest gain of 0.89%.

Two ASX stocks that outperformed  the benchmark index on Thursday by wide margins were Redbubble Limited (ASX: RBL) and Lithium Power International Limited (ASX: LPI), which surged 30.43% and 18.57% respectively. Here’s why these two stocks surged today.

Redbubble Limited (ASX: RBL)

Redbubble Limited is a part of Redbubble group, which owns and operates global online marketplaces, TeePublic. Com and Redbubble.com. The company deals in everyday products such as wall art, bags, housewares, stationary, apparel and so on.

Today, RBL’s shares closed 30.434% up at AU$0.600 apiece, as the company shared that it has returned to positive underlying cash flow in the first quarter of FY24.

During the latest quarter, the company reported an underlying cash flow of AU$0.7 million, registering a rise of AU$16.9 million over the previous corresponding year and an increase of AU$5.5 million over the previous quarter.

Gross profit after paid acquisition (GPAPA) zoomed by 14% YoY to AU$26.5 million, driven by multiple recently implemented initiatives, such as the introduction of artist account tiers on its digital marketplaces and dynamic order routing system in the US for Redbubble marketplace.

In the near term, the company expects that trading conditions in key markets will continue to remain soft, especially in the US. During this period, the focus will be on optimising the cost of goods sold, paid marketing activities and promotions to increase GPAPA. 

In FY24, the expected range of GPAPA margin is 23% to 26%, and the anticipated operating expenditure range is AU$92 – 100 million. Moreover, the company is on track to register positive cash flow in FY24, said RBL.

Lithium Power International Limited (ASX: LPI)

Lithium Power is a diversified pure-play lithium firm with projects in three different regions. One project is located in the brine region of South America, while three projects are located in the spodumene hard rock areas of Western Australia. The company’s prime focus is developing Chile’s next lithium mine on the Maricunga Salar.

Today, before entering a trading halt, LPI shares almost touched AU$0.44 apiece, compared to the previous day’s close of AU$0.35 apiece.

The stock price was pushing higher because of rumours of a possible deal between the company and a mining giant, Corporación Nacional del Cobre de Chile (Codelco).

On 28 September 2023, the company confirmed that it was in talks with Codelco concerning a potential transaction; however, the discussion did not reach a conclusion and Codelco was conducting due diligence.

Today, through an ASX filing, the company confirmed the same.

LPI shares are expected to commence normal trading from 16 October 2023 or after releasing an announcement concerning this matter, whichever takes place earlier.


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