Modeling and talent agency Wilhelmina International (NASDAQ:WHLM) does not have to close down the runway just yet. The company has been limping, rather than sashaying, over the last month, but a new stakeholder could be just what WHLM stock needs to take off again.
Wilhelmina’s debt has been a topic of debate for the last few weeks. Without much free cash flow and with more than a healthy amount of debt, Wilhelmina is seen as a volatile play. The novel coronavirus pandemic is hindering the company as well, as the demand for models has gone down and the existing talent under the Wilhelmina umbrella are displaced around the world due to lockdowns.
In fact, many investors were eyeing Wilhelmina with the thought of bankruptcy in mind. However, as of Monday, the script is flipping.
Venture Capitalist Interest Revives WHLM Stock
This morning, WHLM stock is up a giant 40%, with shares trading at $7.78. The very large and very sudden upswing has been carried by an important piece of news. A venture capital firm has bought up nearly a million shares of WHLM, for an 18.4% stake in the company.
At the beginning of April, Retail Ecommerce Ventures, LLC bought the large stake in WHLM. Retail Ecommerce Ventures is headed by Tai Lopez and Alex Mehr. The two are responsible for a number of purchases in a similar vein to this one. The pair are behind the rescue of companies like RadioShack, Dress Barn, and Pier 1 out of bankruptcy, and now Wilhelmina is at their mercy.
The trade is piquing investor interest today. Trade volume is up astoundingly from the usual. Where WHLM stock typically sees an average trade volume of 11,000 shares, trading volume today is over 14 million. Investors are excitedly and curiously watching Wilhelmina to see how it will dig itself out of its suboptimal situation. And, with lockdown restrictions being eased, the company is seeing its models able to slowly return back to normal operations.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.