HomeFinancial MarketsWhy did Digital Brands Group Inc (DBGI) stock soar on Wednesday?

Why did Digital Brands Group Inc (DBGI) stock soar on Wednesday?

Digital Brands Group Inc. (DBGI) shares soared 26.75% in after-hours on Wednesday, September 22, 2021, and closed the daily trading at $3.08. Even in the regular trading session of Wednesday, DBGI’s stock gained 0.41%. The stock volume remained 1.57 million shares. DBGI shares have moved down by 7.25% in the past week. Over the past three months, the stock has lost 40.59%.

Let’s have a brief look at its recent news.

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DBGI Important corporate changes

On August 31, 2021, Digital Brands Group, Inc (DBGI) announced a series of significant corporate changes.

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Stateside Acquisition

the company announced the successful acquisition of Stateside for an aggregate base purchase price of $10,000,000. The purchase price was evenly split between $5,000,000 million in common stock and $5,000,000 in cash.

DBGI issued Convertible Note

The company earned gross proceeds of $5,000,000 through the issuance of a senior secure convertible promissory note to Oasis Capital, LLC.

Equity Line of Credit

DBGI signed an equity purchase agreement with Oasis Capital to sell up to $17.5 million of its Common Stock to Oasis Capital over 24 months.

DBGI participation in the recent investor conference

Digital Brands Group, Inc (DBGI) recently participated in the 15th Emerging Growth Conference which was held on September 1, 2021. The company was presented by CEO, Hill Davis and CMO, Laura Dowling.

Recent financial results announcement

On August 12, 2021, Digital Brands Group, Inc (DBGI), reported financial results for its second quarter ended June 30, 2021.

Q2 2021 financial highlights

  • DBGI reported net revenue of $1.0 million in Q2 2021 compared to $664,000 in Q2 2020.
  • In Q2 2021, the gross profit margin was 39.3% compared to a negative 40.4% in Q2 2020.
  • Total operating expenses were $11.2 million in Q2 2021 compared to $1.63 million in Q2 2020.
  • It suffered a net loss of $10.7 million, or $1.97 per diluted share, in Q2 2021 compared to a net loss of $2.3 million, or $3.41 per diluted share, in Q2 2020.

DBGI sold additional shares

On June 28, 2021, Digital Brands Group, Inc  announced the underwriters have purchased an additional 361,445 shares of common stock according to the exercise by the underwriters of the remaining portion of their over-allotment option at a public offering price of $4.15 per share. Digital Brands has now sold a total of 2,771,084 shares of common stock and warrants to purchase 2,771,084 shares of common stock for aggregate gross proceeds of approximately $11.5 million.

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The DBGI stock surge on Wednesday is a bit strange because there is no recent news or development for September so we are unsure how it will perform in the coming days.

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