NAKD, the Next GME?

Are you familiar with GameStop (NYSE:GME), the American video game retailer?

In January 2021, a short squeeze of the stock took place, causing major financial disrupt and huge losses for hedge funds and short sellers. Simply explained, approximately 140 percent of GameStop’s public float had been sold short and when hedge funds and short sellers scrambled to buy more shares to cover their positions, the share price skyrocketed.

At its peak in late January, the short squeeze caused GME’s stock price to reach a pre-market value of over $500 USD per share, significantly differing to it’s $17 valuation at the start of the month.

In late January we witnessed one of the most dramatic short squeezes in history, making millionaires out of small retail investors.

The unusually high price and volatility has continued after the peak in late January. On February 24, the GameStop stock price doubled within a 90-minute period, and then averaged in the neighborhood of $200 per share for another month. On March 24, the GameStop stock price fell 34 percent to $120.34 per share after earnings were released and the company announced plans for issuing a new secondary stock offering. On March 25, the stock recovered dramatically, rising by 53 percent.

Between July and November of 2021, the GME price has fluctuated at around $200, which has still provided life changing gains in wealth for retail investors who got in at the right time.

But what caused the GameStop short squeeze?

The short squeeze was initially and primarily triggered by users of the subreddit, r/wallstreetbets, an internet forum now boasting more than 11 million members, or degenerates, although only having a few thousand members at the time. The group of online retail investors banded together, buying and holding the stock, increasing demand by slowly reducing the supply (public float availability). Eventually, a few hedge larger investors got on board and the rest is history.

WallStreetBets, the catalyst for the GME short squeeze, now with over 11.1 million degenerates.

GME’s historical short squeeze result is a testament to the power of small retail investors, and has inspired an investment movement.

The cryptocurrency, Shiba Inu (SHIB), was the next asset to experience astronomical price gains with credit largely being attributed to the reddit army.
Read more about the rise of Shiba Inu.

Following the success of wallstreetbets on reddit, numerous members began discussing the short squeeze potential of the Naked Brands Group stock, NYSE:NAKD.

Naked Brand Group, trading on the NYSE as NAKD.

Created in June 2018, Naked Brand Group (NBG) is a specialist digital intimate apparel and swimwear business focussed exclusively online. Designing, manufacturing and marketing the 74-year-old Frederick’s of Hollywood brand under a license agreement with Authentic Brands Group.

Trading at around 7 cents in November 2020, the NAKD stock price has steadily climbed to around $0.75 USD by November 2021.

In mid 2021, NAKD boasted holdings of over $270 million in cash, but on November 8, announced the acquisition of Cenntro Automotive Group, an early pioneer in Artificial Intelligent (AI) Autonomous Driving and a leading designer and manufacturer of electric light and medium-duty commercial vehicles (“ECV”).

Read the NAKD press release detailing the aquisition of Cenntro Automotive Group.

With a Market Cap of around $642 million, NAKD is currently considered significantly undervalued. Considering multiple factors, including earnings potential, growth prospects and plans in motion, numerous professional valuations have concluded that NAKD stock is intrinsically worth greater than $50 a share.

While NAKD received considerable attention from the WallStreetBets subreddit group, most of this group’s members are now dedicated to the success of their new cryptocurrency, WallStreetBets DApp.

The transition from stocks to cryptocurrency for WallStreetBets birthed the subreddit group, r/NAKDstock, which has blossomed into a community of over 27,000 NAKD investors.

If you are interested in discussing anything NAKD, head to NAKD Cenntro or join the NAKD Army on Telegram.

Most members of the NAKD Army have made promises to each other that they will not liquidate their holdings until the stock price exceeds $230. Do you believe NAKD will follow in the footsteps of GME?

Goal Setting & Visualisation: critical tools for success

Understanding the importance of goal setting and how to get the most out of the process Whether it be to understand the path you wish to travel in life, devising a way of getting there, or even just keeping you on the right track, goal setting can improve many aspects of our present and future-selves.…

Keep reading

Published by Harry Hansford

Australian in Spain with a passion for all things sport, health, fitnes & nature. Go deeper to find out more.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: