Shares of Sequential Brands Group Inc. (SQBG) were falling -12.36% in after-hours trading to trade at $13.76. In Friday’s session, Sequential Brands Corp. gained 89.16% to close at $15.70. Friday’s volume was 28.04 million shares, a greater volume than the average daily volume of 1.39 million shares reported by the company for the past 50 days. Over the last year, shares of SQBG stock have gained 90.53%, and they have risen by 69.36% over the past week.
SQBG’s stock price has dropped -46.63% over the past three months, while over the past six months, it has dropped 9.41%. In addition, SQBG’s market value is $14.66 million, with 1.65 million shares outstanding. Since the SQBG stock rose in the absence of recent news, we can refer to recent developments for a more thorough understanding of the stock.
How have things been at SQBG recently?
In addition to owning, promoting, marketing, and licensing consumer brands in the active and lifestyle categories, Sequential Brands is a marketing and licensing company. In order to make sure that its brands continue to thrive, SQBG employs strong marketing and brand managers. Retailers, wholesalers, and distributors can currently access SQBG’s brands in a wide variety of consumer categories in the United States and worldwide.
Sequential Brands shareholders have recently been served with a lawsuit by the Shareholders Foundation Inc. There was a lawsuit filed against SQBG on March 16, 2021, alleging securities law violations. The plaintiff alleged that:
- As of late 2016, SQBG made false and/or misleading statements and/or failed to disclose those false and/or misleading statements.
- This caused SQBG’s goodwill to be impaired, or it should have been aware of it.
- The material write down to goodwill by SQBG was avoided and delayed throughout late 2016 and 2017.
- Over the course of late 2016 and 2017, SQBG materially overstated its income, goodwill, and assets as well as its operating expenses.
- The internal controls at SQBG were inadequate.
- In addition, there were omissions, misstatements, and control violations that SQBG failed to restate, correct, or disclose.
- SQBG was at greater risk from regulatory scrutiny and enforcement because of the foregoing.
- As of every relevant time, SQBG’s statements regarding its business, operations, and prospects were materially false and misleading.
Strategy to sell assets:
Bloomberg reported last month that Jessica Simpson brand’s troubled owner company, SQBG, is nearing a deal to sell the majority share to the singer. SQBG planned to sell off other assets as well as filing for Chapter 11, Bloomberg reported citing sources.
Sequential Brands (SQBG), which had been seeking to sell off its assets to avoid liquidity troubles while negotiating with creditors, is now preparing to sell its brands. In addition to repaying its creditors, SQBG would use proceeds from the sales to pay KKR & Co., its largest lender.