Why is the Bubs Australia (ASX:BUB) share price on fire today?

The Bubs Australia Ltd (ASX: BUB) share price is on fire today, up more than 6%. Why is this company on the rise when the ASX 200 is falling?

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A graph ablaze with fire going up, indicating a fired up and surged share price

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The Bubs Australia Ltd (ASX: BUB) share price is on fire today. Bubs shares are currently up a healthy 6.15% to 34 cents a share. That compares pretty well against the S&P/ASX 200 Index (ASX: XJO), which has lost a nasty 2.06% today, translating into an outperformance from Bubs of more than 8%. But things don’t look quite as rosy if we examine Bubs’ share price performance over the past year or two.

Bubs shares have been through the wringer in recent months. And over the past 2 years really. Since topping out at a high of around $1.42 a share back in May 2019, it has been a one-way ticket for investors ever since. Bubs is now down around 75% from those highs on today’s pricing. Bubs shares are also down 30% over the past month, 42.5% year to date and almost 58% over the past 12 months. The company is even down 28% from the low point the company reached in the COVID-induced market crash last year.

As my Fool colleague James Mickleboro explored last week, Bubs has been hit on multiple fronts. Supply channels to China have dried up. Brokers have not been kind to the company. And Bubs has been doing a lot of dilutive capital raising of late.

So what about today’s positive move? Has Bubs finally turned a corner?

Has the Bubs share price finally bottomed out?

Well, it’s not entirely clear as of yet why bubs shares are outperforming today. There have been no official announcements or news out of the company since 10 May. That was when an announcement of a new chief operating officer, Fabrizio Jorge, for the company was made public.

It’s possible that a prominent broker has changed their minds on bubs, or at least sees some upside from here. It’s also possible that a large institutional investor has taken a look at the bubs share price, and decided it’s finally too cheap to ignore. ASX data does show that there is a significant level of trading activity in the stock today, with 1.7 million shares changing hands at the time of writing. That’s a lot more than the almost-600,000 shares that traded yesterday.

Whatever the reason for the sharp rise in the Bubs share price today, it’s a move that will undoubtedly be welcomed by bubs shareholders. At the current share price, Bubs has a market capitalisation of $211.4 million.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST FPO. 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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