WSB: Naked Brand stock price drops 70% off highs

Shares of Naked Brand (NASDAQ: NAKD) are trading over 13% lower in pre-open Tuesday, a day after plunging nearly 14%. 

Fundamental analysis: Nearly $50 million raised

The company, which sells products in the intimate apparel and swimwear sectors, said it successfully raised $50 million through the registered direct offering. It sold 29,415,000 of its ordinary shares at a price of $1.70 per share, which is at-the-market under Nasdaq rules.

“The estimated net proceeds to the Company from the Offering are expected to be approximately $46.9 million after deducting the placement agent’s fees and other estimated offering expenses,” it is said in the statement. 

Elsewhere, the WSB saga has continued to dominate headlines around the globe. Robinhood, an online trading platform that found itself in a midst of the trading war, announced it raised a further $2.4 billion to total $3.4 billion in new capital raised since Friday. 

“Robinhood has served millions of people who have felt left behind by America’s financial system. We’re confident that Robinhood will emerge stronger through this phase of growth and unprecedented demand,” said Micky Malka, Managing Partner at Ribbit Capital, the private equity firm that led the latest fundraiser.

“This round of funding will help us scale to meet the incredible growth we’ve seen and demand for our platform. We are humbled by our customers’ response to our offering, and remain inspired by everyday people taking control of their financial futures,” said Jason Warnick, CFO, Robinhood.

In addition, Reuters reports that an online broker is in talks to raise an additional $1 billion in new debt to bolster its liquidity. 

Technical analysis: Profit taking facilitates a pullback

The Naked Brand stock has been one of the beneficiaries of the WSB saga. The stock soared over 250% on Wednesday, before rallying an additional 130% on Thursday. However, profit-taking from early investors led to a rotation lower.

Naked Brand daily chart (TradingView)

Overall, NAKD stock price now trades over 70% lower compared to Thursday’s highs. The stock fell 13.94% yesterday and it is trading over 13% lower in pre-open Tuesday. Normalization of the market environment may lead to a dip below the $1.00 mark. 

Summary

The Naked Brand stock has rotated lower to trade over 70% lower compared to Thursday’s highs as the short squeeze momentum slows down. 

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