Is 1847 Goedeker Inc. (NYSEAMERICAN: GOED) Going Downhill From Here?

1847 Goedeker Inc. (NYSEAMERICAN: GOED) shares plunged 70% to $1.85 after announcing an underwriting public offering of 91.1 million units. The volume of 1847 Goedeker Inc. stock was 54 million shares on Thursday, as against a volume of  228,000 shares on a 65-days average. On Thursday, the stock also dipped to its 52-week low at $1.81.

IPO of the common stock units

The e-commerce company for furniture and appliances recently announced underwritten IPO of its common stock units. The cost of each unit is $2.25. The company said that the proceeds of the offering would sum up to be approximately $205 million before underwriting discounts, expenses, and commissions. 

The warrants included in this public offering can be exercised immediately at $2.25 a piece. The expiry date of these warrants is five years from the issue date. This offering shall close on June 2. 

Net proceeds of this public offering are to be used to pay partly in cash, against the proposed takeover of Appliances Connection, along with the acquisition expenses and fees. Acquisition of Appliances Connection was announced in Q4 2020 and is expected to be finalized in the second quarter of this year. The remaining amount is to be used to generate corporate expenses and working capital. 

Q1-2021 financial report of 1847 Goedeker 

Meanwhile, 1847 Goedeker Inc. had recently announced its first-quarter 2021 financial results. The combined revenue rose 84% on a YoY basis and totaled at $123.0 million in Q1-2021. There has also been an increase of 18.9% in gross profits when compared with Q1 2020. Gross profits came in at $32.2 million, or 26.2% of the net revenue of Q1 2021. 

Combined adjusted EBITDA in Q1-2021 is $14.7M, crossing the pre-decided threshold of $14.4M in the previous year. 

Better financial results are a result of the situation normalizing in the wake of the COVID-19 pandemic. The company stated that even though the fulfillment abilities are becoming better, they’re only at 61% compared with the historical pace of 80%. The manufacturers are now returning to previous production capacity, which is expected to normalize the shipping trends of the company. 

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