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The Bubs Australia Ltd. 09.30 ASX: BUB The stock price was a strong performer on Tuesday.
Shares of the children’s formula company ended the day 16% higher and amounted to 43 cents.
Why has the stock price of Bubs increased?
Bubs ’stock price rose on Tuesday, despite no news from the company. However, some industry news may have prompted its shares.
At night, the U.S. Food and Drug Administration (FDA) announced important updates about its ongoing work to increase the supply and availability of infant formulas in the country.
U.S. FDA Commissioner Robert M. Caliph, MD commented:
We are aware of the difficulties faced by parents and caregivers in obtaining infant formula, and the FDA is focused on increasing the availability of supplies of these products in the country, including new steps regarding imports. We are also reviewing the supply of baby formulas developed by manufacturers across the country and around the world to determine if it is possible to redistribute their distribution to help get the right product in the right place and at the right time.
Investors may think this is good for Bubs, which late last year launched a range of Aussie Bubs brand formulas on a number of e-commerce platforms in the country. Since then, this has been facilitated by the presence in a number of supermarkets.
With an update in the third quarter, Bubs founder and CEO Christy Carr has released an update about her operations in the US. She said:
Our retail footprint in the US continues to expand with the Aussie Bubs Goat and Grass Fed Toddler Formula range in 254 Smart & Final supermarkets in Southern California and 130 Buy Buy Baby stores in 37 states. These new lists complement our existing retail presence at Ralph’s 177 supermarkets and online at Walmart.com, Amazon.com and Thrive.com.
Time will tell whether the Bubs will benefit from this deficit, but investors seem to be betting on it.