Send me real-time posts from this site at my email
Motley Fool

Why Naked Brand Stock Soared Today

What happened

Shares of Naked Brand Group (NASDAQ: NAKD) surged 21.8% on Monday, as investors' excitement about a potential game-changing acquisition reached a fever pitch.

So what

Naked Brand's popularity among traders on Reddit and other social media sites helped it raise cash via stock offerings earlier this year. After ridding itself of debt and amassing a war chest of $270 million, Naked Brand's management team went hunting for takeover targets.

On Friday, the company announced that it had found a "disruptive opportunity" in the clean energy industry that could serve as a potential merger partner.

Naked Brand Group's stock price is up sharply since announcing progress toward a possible acquisition. Image source: Getty Images.

"During my career as an owner and operator of many diverse businesses, I have always been attracted to commercial opportunities that benefit our environment and help contribute to the growing ESG mandates that major corporations are implementing today across the globe," CEO Justin Davis-Rice said in a press release, referring to environmental, social, and governance mandates. "This company is a market leader with cutting edge patented proprietary technology that we believe satisfies those ESG mandates."

Davis-Rice cautioned, however, that he could make no assurances that a deal would be completed.

Now what

Even if an agreement is reached with this as-yet-undisclosed company, entering a completely different industry than its current swimwear and intimate-apparel business certainly has its risks. So, investors may want to approach its shares with caution.

Nevertheless, Naked Brand was back to its meme-stock ways on Monday. Mentions of its stock on Reddit soared 683% over the past 24 hours, according to data analysis site Memeberg Terminal, which no doubt contributed to its share price gains on Monday.

10 stocks we like better than Naked Brand Group Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Naked Brand Group Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 17, 2021

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue