Naked Brand Group (NASDAQ:NAKD) stock may continue facing dilution, and it is likely to execute a reverse split unless it regains Nasdaq’s compliance. However, the stock has, up to October 25, 2021, to regain compliance and maintain a minimum stock price of more than $1 for ten consecutive days. In recent years the stock has received numerous notices, and if it considers a reverse split, it will be the second time in two years the company is making such a move.
A reverse split will make sense considering the company is transforming itself into an eCommerce play. For investors to take Naked Brand seriously, the company must boost its share price out of penny stock territory. There are concerns about whether a reverse split can change fortunes for the company considering in the lingerie business is not easy to consistently make money.
If the company goes the reverse split path, it can dodge the minimum bid price requirement. Therefore in the coming months, investors should keep an eye on the stock.