Is Naked Brand Group (NASDAQ:NAKD) Stock Ready For A Short Covering Rally?
3:20 pm Thursday, August 26th, 2021
The meme stock rally has been one of the most remarkable trends in the market in many years and it still continues to be the case as more stocks go on such rallies due to the actions of retail investors who are active on social media platforms.
However, after the start of the trend earlier on this year, it is perhaps time to take stock of the situation and take a look at some of the stock which enjoyed considerable gains. One of those is the Naked Brand Group (NASDAQ:NAKD) stock. It was a down on its luck company at the start of the year but since the start of the meme stock rally, it benefitted massively and has clocked gains of as much as 72% this year.
However, such rallies are not sustainable and ultimately Naked Brands has to generate long-term growth in order to attract investors. Due to the rally, the company issued a lot of new shares and eventually transformed into a whole e-commerce operation.
While the change in strategy might be a commendable move, it is also necessary to keep in mind that e-commerce is one of the most competitive businesses to find success in at this point in time. Its brand, Frederick’s of Hollywood, is going to have to compete with many established brands in order to make a name in the industry. Hence, the road to sustainable growth for the company is long and at this point in time, the Naked Brands stock might not be the best option despite the obvious allure.
