Shares of the Hong Kong-based ready-made meal provider, DayDayCook, skyrocketed nearly 200% during trading on June 12th in New York.The company unveiled its acquisition of the Asian food brand, Omsom, earlier that day.
Details
DDC’s stocks saw a nearly 200% surge by the close of Wednesday’s session, reaching $1.54 per share, momentarily soaring above $2.5 per share. This marks the highest point in the last three months. Post-market, the rally continued, albeit the stocks later experienced a drop of nearly 19%. As of Thursday’s pre-market, they were once again in decline, losing approximately 27% at the time of publication.
On Wednesday, the company announced the purchase of the Asian sauce and noodle manufacturer, Omsom. DDC believes that the acquisition will accelerate the introduction of new Omsom products and improve financial performance. . The purchase will be partially funded with cash and partially with stock. Five new DDC employees, who previously worked at Omsom, received four-year options for 160,000 common shares. Last year, the retailer issued 3.9 million shares on the stock exchange. Thus, the stake of the five employees will amount to approximately 4%.
Social media dealings
With the acquisition of Omsom, DDC’s presence in the US is rapidly growing—two more assets were acquired last year, according to the company’s founder Norma Chu.
“It all started with a message to Norma on LinkedIn,” says Omsom co-founder Vanessa Pham. “When we first read about DayDayCook’s vision and mission, we knew we had to reach out to them immediately. (…) We’re speeding up our next chapter alongside another business founded and led by Asian women.”
Chu founded DDC in 2012, while Omsom was launched in 2020 by American sisters of Vietnamese descent, Vanessa and Kim Pham. They felt that Asian food in the US was “watered down,” lacking authentic flavor. Initially targeting end consumers, Omsom entered national retail within two years. The company now collaborates with renowned Asian chefs, and its sauces and spicy noodles are sold in over 2,000 US stores.
Context
DDC has been a public company for about six months. It conducted its IPO on the NYSE on November 17, 2023, but failed to attract significant investor interest: 3.9 million shares were priced at $8.5 each, 10% below the lower end of the indicated range in the prospectus. By early December, DDC’s shares had plummeted by approximately 30%. The company then decided to repurchase up to 500,000 shares (12.8% of the issued shares) within a year to support their value.
In May, DCC notified investors that it was not compliant with exchange requirements, as it failed to provide the US Securities and Exchange Commission (SEC) with its 2023 report. In case the company does not rectify this violation, it may lose its listing on the NYSE.
Analyst Insights
One analyst is monitoring the company, according to MarketWatch. Their recommendation is to buy, with a target price of $21.6 per share, indicating a growth potential exceeding 1,300%.
