Why Naked Brand Group Fell as Much as 18% at the Open Today
Shares of Naked Brand Group (NASDAQ: NAKD), which is an online retailer of intimate apparel, fell sharply at the open of trading on Dec. 22. The drop was just shy of 19% at one point in the first half hour of trading, but by 10 a.m. ET had settled at around 12.5%. There was a notable news item this morning, but it really didn't change anything about the company. However, an update from Dec. 21 should probably be looked at more closely.
Before trading started on Wednesday, Naked Brand group announced it had completed a 1-for-15 stock split. Stock splits change the number of shares outstanding, but they don't actually change the percentage of a company that shareholders own. So, in the long term, they usually aren't a material issue except for the impact they have on investor sentiment. That said, There's another bit of news here that has to be taken into consideration. This particular stock split was undertaken to facilitate Naked Brand Group's acquisition of Cenntro Automotive Group.
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Source Fool.com
