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Why did Sequential Brands Group saw a 89% increase?

Sequential Brands Group Inc. stock was recently trading at $15.70, up 89 percent. At least three times on Friday, the stock was temporarily halted owing to volatility. Throughout the day, shares fluctuated between $25.25 and $8.72.

About the Company

Sequential Brands Group, Inc., which includes the AND1 brand, owns, promotes, markets, and licences a portfolio of consumer brands in the lifestyle and active sectors. Sequential employs excellent brand management and marketing teams to guarantee that its brands continue to flourish and develop. Sequential has licenced and plans to licence its brands to retailers, wholesalers, and distributors in the United States and across the world in a number of consumer sectors.

Sequential Brands

Image source: https://www.sequentialbrandsgroup.com/

Recent News

The Jessica Simpson, Joe’s Jeans, and Gaiam labels are among the company’s consumer brands. Sequential Brands voiced reservations about its capacity to continue as a going concern in April. It said a week ago that a waiver under its credit arrangement had expired and that it was in negotiations with lenders about obtaining another waiver.

Lawsuit

A lawsuit was filed against Sequential Brands Group, Inc. on March 16, 2021, alleging securities law breaches. The plaintiff claimed that the defendants made false and/or misleading statements and/or failed to disclose that the Company knew or should have known that its goodwill was likely impaired in late 2016, that the Company avoided and delayed the material write down to goodwill in late 2016 through 2017, that the Company materially understated its operating expenses and net loss, and that the Company materially overstated its operating expenses and net loss in late 2016 through 2017.

And the Company failed to restate, correct, or disclose relevant improprieties, deceptive conduct, misstatements, omissions, and control violations, that as a result of the foregoing, the Company was subjected to increased regulatory scrutiny and enforcement, and that as a result, defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked materiality.

Shareholders

Insiders own 34.98 percent of Sequential Brands Group, Inc.’s total outstanding shares, while institutional investors own 22.4 percent, with a float percentage of 34.46 percent. The company’s largest stakeholder is Siguler Guff Advisers, LLC, with 22 institutions owning stock. The firm had over 60.19 thousand shares (or 3.63 percent of all shares) as of March 30, 2021, for a total value of $1.38 million.

Geode Capital Management, LLC, with 46.89 thousand shares, is the second largest institutional position, accounting for about 2.83 percent of outstanding shares. These shares were worth $1.07 million at the market price on March 30, 2021.

What does the future hold?

The SQBG share has a 52-week high of $40.49, which is down -166.66 percent from that high but still represents a stunning jump increase since the share price dropped to a 52-week low of $4.14. The company’s market capitalization is $16.73 million, with an average intraday trading volume of 108.85 million shares over the last 10 days and a three-month average of 670.74 million shares.

According to a review of the company’s performance during the last five years, earnings have increased by an estimated 12.64 percent. While earnings are expected to fall by -152.4 percent in 2021, they are expected to rise by 15% annually over the next five years.

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