Why the Bubs Australia Ltd share price is climbing again today

The Bubs Australia Ltd (ASX:BUB) share price is volatile as day traders bet on the stock.

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The Bubs Australia Ltd (ASX: BUB) share price closed 7 per cent higher today, despite the organic baby formula retailer releasing no specific news to the market.

On September 1 the company completed a $16 million capital raising at a price of 45 cents per share to institutional investors that resulted in the issue of around 35 million new shares in the business. The new shares commenced trading on the ASX on September 11, although the substantial dilution of the placement does not appear to have put off retail punters bidding the shares up around 25% higher in valuation.

For the year ended June 30 2017 ,Bubs posted revenues of $4.5 million and a net loss of $5 million. It did grow sales 33% for the six months ending June 30 2017 over the prior corresponding half and now has great expectations baked into its lofty valuation.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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