Why Naked Brand (NAKD) Could Fly High After Recent Sell-Off

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.

Jack Dawkins

Finance and Tech Contributor

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