Iconix Brand Group Inc (NASDAQ:ICON)
Iconix Brand Group Inc (NASDAQ:ICON) stock is down over 60% in the last two days after it received notice that Wal-Mart has decided not to distribute the DanskinNow brand beyond January 2019. The market reacted harshly as observers believe the loss of royalty revenues, approximately $15.5 million, may negatively affect Iconix’s ability to service current debt and shrink it lending alternatives.
Iconix Brand Group Inc (NASDAQ:ICON), headquartered in New York City, is a brand management company that owns, licenses, and markets a portfolio of consumer brands across the women’s, men’s, entertainment, and home industries globally.
John Haugh, CEO of Iconix commented, “Improving the balance sheet, enhancing our liquidity position, and more actively managing our brands continues to be our primary focus. With our announcement today of Starter at Amazon, we are demonstrating our ability to successfully reposition our brands. We expect this launch will return Starter to its iconic position of a leading premium athletic brand. Our team will be pursuing similar strategies as we reposition and build our Mossimo and Danskin brands. With respect to the balance sheet, we entered into an amendment of our existing credit facility and will be focused on generating funds in the near term to enhance our liquidity position.”
Other Iconix Developments
Today Iconix Brand Group Inc (NASDAQ:ICON) also announced that Starter, an Iconix premium athletic brand, is now available on Amazon Prime. This new distribution agreement is on the hells of the third quarter 2017 announcement that Starter was no longer exclusive to Walmart.
On October 25, 2017, the United States District Court for the Southern District of New York dismissed the consolidated securities class action brought against Iconix Brand Group Inc (NASDAQ:ICON). In its opinion granting Iconix’s and other defendants’ Motion to Dismiss the matter, the Court provided plaintiffs leave to replead their claims by November 14, 2017.
ICON Stock Performance
ICON stock neared its all-time highs in mid-2014 when the shares were topping out near $45. Since then the shares have slid precipitously and were valued under $10 by early 2016. The recent lows under $2 mark not only 52-week low, but all-time lows. In the last week alone ICON stock has lost almost 70% of its value.
Accordingly, the Relative Strength Index figure is around 12. Experts believe that any value below 20 is usually a trigger for an “oversold” condition, however investors should note that this sell-off follows widely published news of future revenue and earnings losses.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.