Why Naked (NASDAQ:NAKD) Stocks Galloped 252%?

Summary

• Naked stocks, which catapulted by over 252 per cent on Wednesday, are currently under the threat of getting delisted from the Nasdaq exchange.
• Its latest stock price surge came amid the raging chatroom war between bullish investors and short-sellers, which saw GameStop and many such shorted stocks go on a wild rally this week.
• The company announced the launch of a direct at-the-market offering on Wednesday.

Stocks of apparel maker Naked Brand Group Ltd (NASDAQ:NAKD, NAKD:US) catapulted by over 252 per cent on Wednesday, January 27, leaving many to wonder the cause behind this sudden surge.

Naked stocks are currently under the threat of getting delisted from the Nasdaq exchange for being consistently unable to maintain the minimum US$ 1 per share price for 30 consecutive days. As the shares closed trading at US$ 1.38 on Wednesday, investors hoped that the scrips will rise high enough to regain compliance on the stock exchange.

Let’s take a closer look at the details to understand Naked Brand’s latest stock surge.

Naked Brand Group Ltd (NASDAQ:NAKD)

Current NAKD Stock Price: US$ 1.38

Naked’s latest stock price surge came amid the raging chatroom war between bullish investors and short-sellers which saw GameStop and many such shorted stocks go on a wild rally this week. It is likely its latest gains was fueled by day traders’ interest as well.

©Kalkine Group 2021

Another driving factor for its stock price rise could be the company’s latest announcement about launching a direct at-the-market offering of 29.4 million shares at a price of US$ 1.7 apiece. Naked Brand said that its plans to raise gross proceeds of about US$ 50 million from the direct offering, which is expected to close on or around February 1.

Last week, on January 21, Naked Brand had announced its plans to rejig its business model in order to shift its focus from physical stores and concentrate on expanding its e-commerce front.

Before Wednesday’s surge, Naked stocks had been trading under US$ 1 since June last year. The company is said to have until May 24 this year to pull up its stock price to regain its compliance on Nasdaq.

The scrips currently post an increase of nearly 619 per cent year-to-date. Propelled by Wednesday’s 252-per cent surge, Naked stocks now reflect a growth of nearly 1400 per cent for the last three months and that of over 2283 per cent for the last six per cent.

Naked Brand focusses on the design and manufacture of intimate wears and swimming apparels. The European clothing company currently has its business in 14 countries via over 300 locations and e-commerce platforms.