For investors in intimate apparel and swimwear retailer Naked Brand Group (NASDAQ:NAKD), the past couple of years haven’t always been easy. The onset of the Covid-19 pandemic certainly made it difficult to profit from a position in NAKD stock.

However, there were some exciting times along the way. Particularly notable was the share-price rally in January, which was probably precipitated by social media traders.

All along, though, the $1 price point held significance for NAKD stock traders. Even now, the bulls are pushing hard but can’t seem to break through that barrier.

But a recent development suggests that Naked Brand is evolving and moving into a red-hot market segment. If this pans out, it could be the catalyst that spurs a massive buying spree, leading to much higher share prices.

A Closer Look at NAKD Stock

It’s would be difficult to prove this, but the meme-stock traders on Reddit may have targeted Naked Brand for a short squeeze in early 2021. There was a lot of meme-stock trading happening at that time. Plus, the Reddit mob tends to focus on low-priced stocks.

Otherwise, it would be difficult to account for the stock’s run-up from 40 cents to $3.40 in January. So it’s likely that Reddit traders propelled NAKD stock higher—and I imagine that they could do it again if they wanted to.

From March through the end of September, NAKD share price stayed below $1. Could the short-squeeze crew be eyeing Naked Brand for a sequel?

One thing’s for sure: holding a short position in NAKD stock would be a dangerous proposition. If you don’t like the stock, feel free to just avoid it altogether.

And if you believe in the company, consider holding a few shares, as they’re quite affordable at the moment.

The First Turning Point

As I alluded to earlier, Covid-19 pretty much wrecked Naked Brand’s business model in 2020. In the midst of a pandemic, people just weren’t in the mood for intimate apparel. Something had to be done; the business model needed to change. It was a do-or-die moment for Naked Brand.

Thus, a huge turning point came for the company on April 23. Specifically, Naked Brand’s shareholders approved the company’s divestiture of its Bendon brick-and-mortar operations.

After the Bendon divestiture, Naked Brand was free to focus on developing the company’s Frederick’s of Hollywood online business. That’s a smart move — today’s businesses must focus on e-commerce to remain competitive.

But there was more to the story. The company also teased that it intended to focus on strategic acquisitions which, among other things, would “provide the opportunity to generate cross business operational synergies.”

Gaining (Some) Clarity

Back in April, the company didn’t specify what types strategic acquisitions would yield these “operational synergies.” And to be frank, I still don’t know what the company was thinking about at that time.

With the recent release of a shareholder letter, however, we may have gained some clarity. This isn’t complete clarity, mind you. The shareholder letter still kept the language vague and mysterious.

So here’s the bombshell, courtesy of Naked Brand CEO Justin Davis-Rice:

“I am happy to report that after extensive searching and due diligence, we believe we have found a disruptive opportunity in the clean technology sector.”

Now, that’s rather unexpected, wouldn’t you agree?

Davis-Rice added that the potential target company is a “market leader” in ESG with “cutting edge patented proprietary technology.” Furthermore, Naked Brand has apparently made “significant progress over the past few weeks” and believes that the path to a definitive agreement is “in sight.”

The Bottom Line on NAKD Stock

Did you ever imagine that there would be an ESG business called Naked Brand?

It’s a strange time, and a strange market. But hey, clean energy is a hot market, and I can’t blame Naked Brand for going with the flow.

Hopefully, we’ll get more specifics on the company’s unexpected foray into the ESG market soon. Until then, feel free to pick up a few shares of NAKD stock, if only for its meme-worthiness and the hope of clearing $1 once and for all.

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On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.