Headquartered in Japan, Yoshitsu Co., Ltd (NASDAQ:TKLF) was founded to provide retail and wholesale health and beauty products. To capitalize on a much wider consumer segment, TKLF has focused its efforts on a NASDAQ listing for the past few years. These efforts have proved successful as the company recently announced the closing of its initial public offering of 6.25 million American Depositary Shares at a PPS of $4. Soon after its IPO closing, TKLF rocketed more than 900% and closed at a shocking $32 on its first trading day. In light of this, TKLF is among the NASDAQ penny stocks showing major potential.
TKLF Stock News
As a Japan-based company, TKLF’s mission centers around becoming a diverse global entity that delivers high-quality and safe products to people around the world. To deliver on this, the company recently announced its initial public offering of 6 million American Depositary Shares (ADSs) – each representing one ordinary share of TKLF – at a PPS of $4.
Positioning the company for a successful listing, Univest Securities, LLC – a full-service investment bank and FINRA member – acted as the sole book runner to the offering. Shortly after, the ADSs were approved for listing and trading on the NASDAQ capital market. On January 14th, TKLF announced the closing of its IPO of 6.25 million ADSs – including the 250,000 issued from the partial exercise of the underwriter’s option.
After its offering closed, TKLF saw a massive 900% increase in its PPS overnight – which positioned it as one of the most active NASDAQ penny stocks of the week. Since then, the company has emphasized it will not be issuing any offerings for the next 6 months. It also highlighted its lock-up agreement which does not permit shareholders owning 5% or more of ordinary shares to sell or transfer them for the 6 months following January 14th.
In light of this IPO, TKLF received gross proceeds of approximately $25 million – calculated before deducting underwriting discounts and other expenses. The company intends to utilize net proceeds from the IPO to expand its physical and online stores as well as enhance its reach globally. Going forward, TKLF will focus on enhancing its directly-operated physical stores as well as adding franchise stores. To prepare for further growth, TKLF plans to improve its distribution centers and logistics systems as well.
TKLF is well-positioned to deliver on these plans given its proven ability to generate impressive revenue growth over the past few years. As a matter of fact, the company saw an $82 million increase in its revenue between 2020 and 2021 – most of which is attributed to its increasing online presence during the pandemic. With these net proceeds and ongoing expansion plans, the company already has a competitive edge over many other players in the industry.
In this way, TKLF’s decision to list on the NASDAQ could prove a major catalyst for the company which has spent years focused on expanding globally. Aside from 116 wholesale customers in Japan, the company also operates through both physical and online stores throughout China, US, UK and Canada. By utilizing gross proceeds from this offering, the company could capitalize on both its physical and online stores.
In terms of its share structure, the company has a market $118 million – leaving a lot of room for further growth. With only 36 million outstanding shares, TKLF has an incredibly low float and could see a massive run as its catalysts play out. With these factors in mind, TKLF is definitely one of the NASDAQ penny stocks to lookout for!
Media Sentiment
@CastratrixX anticipated TKLF’s run-up in light of its extremely low float.
@Mitch___Picks is watch TKLF to see if it will regain some ground
Technical Analysis
Following its IPO, TKLF is trading at $3.29 with a support near 2.49 and a resistance at 31.02. Accumulation has been declining following a major spike on January 18th. The MACD is bullish but seems poised for another crossover. Even though the RSI is at 35 – indicating the stock is oversold, it continues to trend upwards.
The major fall in accumulation and the low RSI are largely attributed to investors cashing out for profits following the company’s IPO. However, despite these indicators, the MACD remains bullish in light of the company’s future expansion plans. As the stock trades near its support, bullish investors could find now a good entry point on TKLF ahead of an anticipated run-up.
TKLF Stock Forecast
As a NASDAQ listed company, TKLF is well-positioned to deliver on its expansion plans and become a globally recognized company. If successful, this venture could generate a major return on investment for early investors. Given that the company has a lock-up agreement with no plans for an offering anytime, investors are finding TKLF a safe long-term investment. As the company utilizes gross proceeds from its IPO to capitalize on its online and physical stores, TKLF is quickly climbing up the list of promising NASDAQ penny stocks in 2022.
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