Naked Brand (NASDAQ:NAKD) stock is in the news today as investors react to the company’s reverse stock split for Tuesday.
The reverse stock split saw the company consolidate 15 shares of NAKD stock down to one share. The goal of the split is to get its share price up to where it needs to be for the Cenntro Automotive merger.
A recent shareholder meeting saw investors in NAKD stock vote in favor of the split and the merger. If all goes well, Naked Brand is expecting the deal to close before the end of the year.
About NAKD stock split
Naked Brands enacted a stock split to satisfy the requirements for its acquisition of Cenntro Automotive Group, a privately held electric vehicle (EV) company.
The requirements include satisfying a minimum share price in order to acquire Cenntro and also satisfying a minimum share price in order for the Nasdaq to approve the application filed in relation with the Cenntro acquisition.
The acquisition is expected to be completed by the end of this year and was approved by shareholders of NAKD stock yesterday. As a result of this transaction, Naked Brand will change its name to Cenntro Automotive Group. However, it will keep its existing NAKD ticker.
The company also announced that it has sufficient capital to complete the acquisition. Therefore, it will not need to raise additional capital “in the short term.”
While investors approved the NADK stock reverse split, it isn’t performing so well now that normal trading hours are underway. Currently, the stock is sitting 17.1% lower than the $7.23 it was boosted to by the reverse split.
While NAKD stock is slipping today, it’s possible we could see shares rise higher in the coming days. That would be especially possible if it announces the close of its merger with Cenntro Automotive before the year closes out. As such, expect volatility from NAKD in the coming days as investors prepare for that announcement.
Naked Brand Group Ltd operates as an intimate, apparel and swimwear company. The company design, manufacture and market a portfolio of company-owned and licensed brands. Its operating segment includes Australia Retail, New Zealand Retail, Australia Wholesale, New Zealand Wholesale, U.S. Wholesale, Europe Wholesale, and E-commerce.
The company generates maximum revenue from the E-commerce segment. Geographically, it derives a majority of revenue from New Zealand and also has a presence in Australia, the United States, and Europe. Its brands include Heidi Klum Intimates, Heidi Klum Accessories, Bendon, Fayreform, Pleasure State, Lovable, Heidi Klum Swim, Naked, Hickory, Bendon Man, and Davenport.