On May 6, 2022, Digital Brands Group Inc. (DBGI) shares fell to new lows after the company announced the pricing of its equity offering the day before. The stock declined by a huge 54.73% during the regular session to mark a new 52-week low of $0.2050. DBGI then closed the session at a price of $0.2250. This steep fall gave way to rebound energy as the dip in the stock price attracted investors. Hence, the stock rebounded in the after-hours as the investors started buying the dip. Thus, the stock entered green in the after-hours to trade at $0.2380 apiece after adding 5.78%.
DBGI’s Equity Offering
Late on Thursday, the luxury lifestyle digital-first brands collection priced its underwritten public offering of 37.4 million shares at $0.25 apiece. Moreover, the equity offering also consists of a 45-day option for purchasing up to 5.4 million additional shares of DBGI’s common stock at the public offering price.
Expected to close on May 10, 2022, the offering will gather gross proceeds of roughly 9.34 million excluding the exercise of the 45-day option. The net proceeds from the offering are intended for use in general corporate purposes and as working capital to fund operations. Additionally, the proceeds will also be used in the repayment of promissory notes in the principal amount of $3,068,750.
The booking running manager for the offering is Alexander Capital, L.P. while Revere Securities, LLC is the co-manager.
A Quick Look at DBGI
From a performance and financial point of view, the company has been showing great progress but DBGI stock on the other hand has been harshly beaten down. As per its previous earnings, the company improved its quarterly revenue by a humungous 425% YOY while also reducing its net loss to $0.76 a share from $3.97 a year earlier. On top of this, the company said to have had a record growth of 776% YOY in January and February 2022 in its e-commerce revenue while the wholesale channel marked over 200% growth.
Furthermore, the company has also been working on expanding its portfolio with back-to-back acquisitions. After acquiring Harper & Jones and Stateside in 2021, DBGI acquired Sundry in early 2022.
Given the positive EBITDA expectation on top of a huge 350% YOY revenue increase anticipation for 2022, DBGI is up for some nice gains. Even though the stock is down over 90% year-to-date, the company has much in store for continued growth.