Why Luxury Retailer Farfetch Shares Are Surging Wednesday
Farfetch Limited (NYSE:FTCH) shares are trading higher after reports emerged suggesting that the British luxury fashion site is in talks to secure emergency funding from Apollo Global Management, Inc. (NYSE:APO).
In fact, the company is in discussions with several parties about securing new financing, according to a news report by Sky News.
The company was recently in the headlines for attracting notable investment interest from Point72 Asset Management, L.P., and noted investor Steven A. Cohen, who reported owning 18.13 million Class A ordinary shares, representing a 5.1% stake in Farfetch.
Related: Farfetch Gains Glamorous Investors: Steven Cohen-Backed Point72 Makes Luxe Bet With 5.1% Share
City insiders revealed on Wednesday that Apollo is just one of several firms engaged in discussions with the company, emphasizing that reaching a deal is not yet a certainty, the report read.
It was unclear whether the new capital would be provided as debt or equity, or a combination of the two, the report read.
The exact amount required remains uncertain, although a recent report by The Sunday Times indicated that the company might need to raise as much as $500 million, Sky News reported.
On November 28, the company announced that it would not be providing any forecasts or guidance at this time, and any prior forecasts or guidance should no longer be relied upon. Meanwhile, the company said it expects to provide a market update in due course.
Farfetch, initially one of the major beneficiaries of the pandemic-driven online shopping surge, has since struggled to maintain its momentum. The company reported a $(281.3) million loss in the second quarter ended June 30, 2023.
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Price Action: FTCH shares are trading higher by 14.1% to $0.7149 on the last checked Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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