NASDAQ:NAKD9 Nov 2021 18:23
From Bloomberg
Meme pivot
At the end of December 2020, Naked Brand Group Ltd. was a public company (ticker NAKD) with a $45 million market capitalization. As its name does not quite suggest, it was in the business of selling “Frederick’s of Hollywood intimates products, sleepwear and loungewear products, swimwear and swimwear accessories products, and costume products” over the internet. It had an annual loss of 73 million New Zealand dollars on revenue of 80 million NZD. (Naked is listed in the U.S., is incorporated in Australia, sells mostly online, and keeps its books in New Zealand dollars. I wouldn’t worry about it!)
At the end of January 2021, all of that was also true except that Naked’s stock price was up 759% for the month. Why? I guess the short answer is “meme stock.” People on Reddit decided it would be fun to buy shares of an online lingerie retailer. There was a lot of short interest in the stock, which attracts meme buyers. When Robinhood restricted purchases of GameStop Corp. and other meme stocks in late January, as the meme stocks were melting up, Naked was on the list; when Robinhood narrowed the list to only the eight memeiest stocks, Naked was one of them.[1] It’s an inner-circle meme stock.
One result of becoming a meme stock is that you can raise money. At the end of January, Naked raised $50 million by selling stock at $1.70 per share, higher than the stock had traded in a year. A month later, it raised another $100 million in a private placement at about $0.93 per share.
One result of becoming a meme stock and raising money is that you can just do something different. Instead of being an online intimates-and-swimwear retailer, you can be … I am reading here “an electric-car company”? Okay sure:
Reddit-fuelled meme stock Naked Brand Group has acquired US-based electric vehicle startup Cenntro Auto Group in a reverse-scrip deal giving the former lingerie penny stock exposure to one of the hottest new tech themes.
The Nasdaq-listed lingerie company, once behind brands such as Loveable and Pleasure State, shot to fame after Reddit traders piled in following “meme-stock” euphoria in early 2021, ballooning its shareholder base to over 900,000 investors.
On Tuesday, Naked Brand announced it would swap 70 per cent of its outstanding shares plus $US282 million … for Cenntro Auto, an electric vehicle developer that has built and sold 4,000 commercial electric vehicles.
Here is the announcement:
Naked Brand Group Limited (NASDAQ:NAKD) (“Naked” or the “Company”) and privately-held Cenntro Automotive Group, Inc. (“Cenntro”), today announced that the companies have entered into a definitive agreement under which Naked will acquire the outstanding stock in three entities comprising Cenntro Automotive Group (“Cenntro”), a commercial EV technology company with advanced market-validated commercial vehicles and autonomous driving technologies in a Stock for Stock Acquisition Agreement (the “Transaction”). Upon
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