The Very Good Food Company Inc. (VGFC), a plant-based food technology company, has surged 9.34% in the premarket trading session. Consequently, VGFC was trading at $0.45 when last checked. During Wednesday’s regular trading session, the stock gained a nominal increase of 0.95% to close the day at $0.41. The stock is on the rise since the company provided a business update.
Decrease in Production
On the 16th of March, VGFC announced to lower the production throughput and headcounts temporarily. The step is taken to manage the inventory levels and also to implement certain initiatives like a decrease in SG&A spending and a pause in the non-critical expenditures. It would also aid in the management of short and long-term liquidity crises which ultimately would lead towards profit generation.
VGFC said that it is experiencing the cash burn at a rapid speed for the last few months. This has happened as the company looked to scale its operational capability during the last few months, which ultimately led to short-term liquidity. However, the recent initiatives adopted by the company would allow it to manage that crisis.
Comments from VGFC CEO
Mitchell Scott, CEO, and founder of VGFC, while commenting on the development said that the company has undertaken certain stock safety measures during the last few months, primarily due to the harsh supply chain environment. These safety measures have caused the inventory to retain the levels which are required to lower the production rate. The company undertook the decision after a detailed review.
What’s in Store for VGFC?
Looking ahead, analysts are of the view that VGFC stock holds several negative signals at this point. Also, it is present in a very wide falling trend. Hence, it is expected to perform weakly in the next couple of weeks. Therefore, Investors should take careful decisions regarding their investment while waiting for future developments.