Bubs have announce a Capital Raise of $63m at $0.52 per share (a hefty discount to the closing price at the time of trading halt of $0.64 or close to 19% lower). Prior to the pandemic shares were hovering around $1.30 so there will be many shareholders unimpressed by further dilution. The purpose of the raise given by Bubs is to capitalise on the formula shortage in North America, build inventories and expanding their canning capability.
Personally I'm glad to have taken advantage of the POTUS declaring an agreement for supply of formula as I sold shares irl for $0.84 the morning after the announcement for a small profit. I had been weighing up my investment anyhow due to the companies insistence on continuing to heavily push for sales into China given the market on foreign brands has shifted dramatically in the country.
I will be keeping Bubs on my watchlist however, if they can land long term contracts in the USA with vendors post the formula shortage abating then this will be fantastic for future revenues. They are also now profitable for EBITDA and even with the heavy dilution with an extra 120m shares on the books, if they are able to take advantage of this free kick they've received in the USA I might be able to buy back in for a much cheaper price with a rosier outlook.
