Why Xpresspa’s Stock Is Trading Low?

XpresSpa Group, Inc., is one of the health and wellness holding company. The NASDAQ: XSPA at https://www.webull.com/quote/nasdaq-xspa company is focused on providing spa services, as well as luxury travel products and accessories. The Company’s holdings are including Fli Charge, Infomedia, and Intellectual Property Assets. Fli Charge designs develop, licenses, manufactures, and markets wire-free conductive power and charging solutions. Infomedia is one of the providers of customer relationship management that monetization technologies to mobile carriers and device manufacturers. The Company’s airport spa is having 57 locations in 23 airports globally and one off-airport spa at Westfield World Trade Center in New York City. The Company’s Intellectual Property division is consisting of a portfolio of approximately 600 patents. These patent applications are covering telecom infrastructure, Internet search, advertising-insertion, mobile, and wire-free charging technologies.

XpresSpa Trading status

XpresSpa Group(NASDAQ: XSPA) is announced a $35.3 million direct offering Aug. 25 that is giving investors one share of XSPA stock and short-term warrants to purchase another at $3.05. The news is sending the share price for the provider of Covid-19 screening. This is having testing services at JFK International Airport and Newark Liberty International Airport down 20% at the Aug. 26 market open. It is now lower than it’s been since the beginning of June. 

  • XSPA Stock Offering is Dilutive
  • The company reported second-quarter earnings on Aug. 19. As of Aug. 14, 56.78 million shares were outstanding. Add in 22.44 million shares for the direct offering (assumes the exercise of warrants within 24 months), and you are getting 79.22 million shares outstanding. 
  • XpresSpa has an enterprise value of $164.2 million. It is adding in the $35.3 million in cash, $14.6 million in total debt, and a current share price as writing this of $2.72, and you are getting a revised enterprise value of $194.8 million.
  • XpresSpa is now worth $30.6 million more than it was before the announcement. If it can be taken the proceeds of the direct offering and turn it into revenue, the odds of its share price falling too much further diminish significantly. 
  • While your one share of stock is now owning slightly less than it did before the announcement, in six months that won’t matter if XpresSpa continues to make inroads with its Covid-19 testing. 
  • Spend Money to Make Money

The Covid-19 is taking a big step up in capital requirements. Given it is generating very little cash flow, traditional financing would be difficult to obtain. A share is offering attractive terms that were the only way.  You can check how to use NASDAQ TotalView before using it.

Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.

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