Naked Brand Group Ltd (NASDAQ: NAKD) has taken a significant beating ever since it rallied to record highs of $3.40 a share. The stock has come down tumbling, having shed more than 50% in the market, and is currently trading below the $1 a share level.
Amid the sell-off, the company’s long-term prospects could receive a significant boost. The filling of a private placement of shares and warrants with the prospects of raising $100 million cannot be taken for granted.
The private placement is poised to bolster its financials, transforming the balance sheet to over $100 million in cash and no debt. The massive balance sheet should position naked Brand to pursue strategic acquisitions that can provide long-term shareholder value. Having $200 million in cash is a positive development that, if used correctly, could help strengthen the company’s growth metrics and long-term prospects. Likewise, the company appears to be trading at a discount given its massive balance sheet that it can use to bolster its apparel and swimwear business.