The stock prices of ready-meal producer DayDayCook (DDC) fell by almost 5% in after-hours trading on Friday, June 21, and continued to decline in pre-market trading on Monday. The company informed the U.S. Securities and Exchange Commission about a possible private placement in favor of creditors and new investors.
Details
DDC’s shares fell by almost 5% in after-hours trading on June 21, dropping to $1.17 per share, and lost another 3.2% in pre-market trading on Monday. In the days prior to that, the company’s share prices had been on the rise: first, they were affected by the news of the acquisition of the Asian food brand Omsom. Then, investors welcomed the appointment of Malik Sadiq, a person with 15 years of experience at American meat producer Tyson Foods, as Chief Operating Officer. However, the shares are down almost 74% since the beginning of the year.
After the close of the trading session on June 21, the company announced that it might issue up to 10 million shares in favor of private investors. Ten of the company’s creditors and four new investors have preliminarily agreed to participate in the issuance, with interest in 9.5 million out of the possible 10 million shares. In exchange for the shares, the creditors will repay or restructure DDC’s debt of $4.8 million, while the new investors will purchase the shares for a total of $2 million.
The company has not indicated the price of the possible issuance. At the close of trading on June 21, the price of one DDC share was $1.23.
Context
DDC is a ready-meal producer based in Hong Kong. In November 2023, the company went public on the NYSE. The IPO did not attract much interest from investors: DDC sold 3.9 million shares at $8.50 per share, totaling $33.15 million, which was 10% below the lower end of the prospectus range. By early December, DDC’s stock prices had fallen by about 30%. The company then decided to buy back up to 500,000 shares (12.8% of issued shares) over a year to support its stock price.
DDC has not published its annual report yet. NYSE has informed investors that this is a violation of its requirements.
Analyst insights
According to MarketWatch, the company is being tracked by one analyst, who rates the stock as a Buy. The price target is $17.4, which is almost 1240% above the current price.
