Naked Brand Group (NASDAQ:NAKD) Stock Pulls Back Sharply After The Recent Jump

Naked Brand Group (NASDAQ: NAKD) is down 28% in a week after the recent jump. After the company announced an unanticipated and surprising merger with a privately held early-stage electric vehicle firm called Cenntro Automotive, Shares jumped.

Market Stats

On Monday, NAKD stock jumped 0.25% at $0.65 with more than 36.07 million shares, compared to its average volume of 69.42 million shares. The stock has moved within a range of $0.6469 – 0.6700 after opening trading at $0.66.

Major Trigger

The merger with an EV startup was unexpected, and currently, the synergies for then companies are unclear. Interestingly markets have been responding well to the news, which sent NAKD stock up. Since the start of the year, the stock has gained 350%.

The company acquired the EV startup giving it access to the electric vehicles sector. Naked Brand will issue 70% of its outstanding shares and cash of around $282 million for the startup, which has so far sold 4,000 electric cars. In addition, Naked Brand will issue three of its existing shares for seven Cenntro shares, and the two companies will together have a market capitalization of $2 billion. The venture into EV shows that Naked Brand is repositioning itself, considering the swimwear and lingerie business has been underperforming.NAKD is worth watching in the coming days.

Traders Corner

NAKD stock is trading below the 20-Day and 50-Day Moving averages of $0.66 and $0.65 respectively. Moreover, the stock is trading below the 200-Day moving average of $0.70.  The stock is up 25% in the past 3-month.