NAKD Stock Price Increases 47.16%: Why It Happened

By Amit Chowdhry ● November 18, 2020
  • The stock price of Naked Brand Group Ltd (NASDAQ: NAKD) surged 47.16% today as it went from a previous close of $0.0880 to $0.1295. These are some of the potential reasons why the stock price increased today.

The stock price of New Zealand-based apparel company Naked Brand Group Ltd (NASDAQ: NAKD) surged 47.16% today as it went from a previous close of $0.0880 to $0.1295. And it was one of the most traded stocks on the NASDAQ today as the volume was over 610 million shares. 

The stock price of Naked Brand Group fell from $2,000 per share to about $0.1295 today since 2015, adjusting for the reverse stock split. 

On top of that, Naked Brand Group was hit hard by the pandemic. For example, the company had to close some of its retail stores for an extended period of time. Ian Bezek of InvestorPlace had noted that Naked Brand’s balance sheet was already suffering before the pandemic though. For example, Naked had lost $17 million on revenues of $59 million for the full last year of operations.

But why did the stock price increase today? Here are some of the potential reasons.

Positive News About The COVID-19 Vaccine

Within the last couple of weeks, there has been positive news about the development of a COVID-19 vaccine. Today, Pfizer had announced that its coronavirus vaccine is safe and 95% effective. I actually had noticed that Naked Brand Group’s stock price saw a slight uptick every time there was some form of COVID-19 vaccine announcement. 

Benchmark Against XCel Brands And Express, Inc.

Naked Brand Group is often benchmarked with New York-based XCel Brands (NASDAQ:XELB) and Express, Inc. (NYSE: EXPR). XCel Brands is also a consumer products company focused on the design and production of branded apparel. And Express is a fashion retailer that caters to young men and women. Today the stock price of Xcel Brands saw a major increase at 21.71% and Express increased 13.84%.

Another fashion company that saw some traction this week is Under Armour. Under Armour is up 13.3% this week. And Argus upgraded the rating for Under Armour from Hold to Buy with a $20 price target. 

L Brands — the parent company of Victoria’s Secret and Bath & Body Works — recently reported third quarter earnings. L Brands reported $1.13 in adjusted earnings per share and $3.06 billion in revenue. Analysts were expecting less than $2.7 billion in revenue.

When companies in the same industry see some tractions, rivals tend to see their stock prices increase as well.

Speculation About A Buyout

There is speculation that there is a company interested in buying out Naked Brand Group. This rumor seems a bit farfetched, but it is one of the reasons why many investors bought into Naked Brands Group today.

Should You Buy Naked Brand?

If you are an experienced day trader or swing trader or have a solid track record trading with options, then it might be worth looking at Naked Brand Group. But investors who buy and hold stocks for the long-haul such as myself should avoid investing in it. It would be better to invest in stocks that have more consistent growth.