The shares of apparel company Digital Brands (DBGI) have been soaring in price thanks to several positive developments at the company. However, given that DBGI reported a disappointing bottom line in its fiscal second quarter, let's evaluate if it is wise to buy the stock at its current price level. Read on.Direct-to-consumer apparel seller Digital Brands Group, Inc. (DBGI), which is based in Austin, Tex., made its stock market debut on July 22, 2021, going public via the traditional initial public offering method and adding $10 million to its cash supply. The company recently launched DSTLD on Amazon (NASDAQ:AMZN) Prime, while also launching its affiliate program across all its brands. Over the past month, the stock has gained 22.1% in price to close yesterday’s trading session at $3.53.
However, the stock has declined by 22.3% in price over the past three months and is currently trading 59.9% below its 52-week high of $8.80, which it hit on July 8, 2021.
DBGI raised $5 million and $1.50 million, respectively, through the issuance of senior secured convertible promissory notes to Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC. Furthermore, ongoing labor shortages and supply chain disruption make the company’s near-term prospects uncertain.