Yesterday’s huge gains in the Naked Brand (NASDAQ:NAKD) stock price are spilling over into Thursday morning as the Australian maker of intimate apparel seems to be poised to get back into the good graces of the Nasdaq Exchange
Naked is currently at risk of being delisted from the Nasdaq as it hasn’t been able to maintain the $1 per share price, as required by the bourse. However, after yesterday’s close at $1.38 a share and today’s push toward the $3 level, investors may have solved the company’s compliance problem.
All of this comes as retail investors over on Reddit r/WallStreetBets (WSB) are taking positions in stocks targeted by short-sellers. This has them rocketing these stocks higher, which is resulting in losses for the short-sellers. It is resulting in massive gains for WSB.
Short interest in NAKD stock was about 31.3 million shares against average daily share volume of 293.4 million, as of Jan. 15. That equates to one day to cover the interest.
The Bottom Line on NAKD Stock
NAKD stock is not alone in this massive rally. Shares of Sundial Growers (NASDAQ:SNDL) surged more than 65% in pre-market action on Thursday morning, following similar Reddit-fueled outsized gains in previously beaten-down stocks, including GameStop (NASDAQ:GME), Koss (NASDAQ:KOSS) and Clovis Oncology (NASDAQ:CLVS).
However, Naked Brand is also not about to miss out on an opportunity. The company announced on Thursday that it will issue 29.42 million ordinary shares at $1.70 each. This should bring NAKD proceeds of about $50 million.
As we reported yesterday, it is quite likely that NAKD stock is also seeing gains in connection with these other stocks. One of the catalysts that draws in WSB investors is recent good news from a company. In the case of Naked Brand, it recently announced plans to refocus its business on e-commerce and expand its digital storefront.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.