Why the Wellnex Life (ASX:WNX) share price is crashing 75% lower on Thursday

Wattle Health is back as Wellnex Life…

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The Wattle Health Australia Ltd (ASX: WHA) share price has returned to the ASX boards this morning under both a new name and ticker code after over 18 months in suspension.

Wattle Health is now known as Wellnex Life Limited (ASX: WNX) and returns to trade after the ASX provided conditional approval for the reinstatement of its securities.

Unsurprisingly, after such a long time in suspension, investors have been finally able to offload shares this morning at long last.

This has led to the Wellnex Life share price crashing to 12.5 cents. This is down 75% from its pre-suspension share price of 50.1 cents.

What’s changed?

Wellnex Life calls itself an Australian brand and distribution company of customer-focused health and wellness products. It was established when Wattle Health acquired the Brand Solutions Australia and Pharma Solutions Australia businesses.

Management notes that the combined company is now on a mission to deliver health, wellness and vitality solutions to consumers worldwide.

These acquisitions mean the company has an existing portfolio of consumer brands already in stores and on shelves and a pipeline of new brands that are ready-to-ship. These include Uganic nutritional milk, Iron Gummies, Little Innoscents skincase, Simply7 Lentil Chips, Wagner Ibuprofen and paracetamol, and Wakey Wakey energy gummies.

Management also highlights that it has ~$20 million in annualised revenue and a 10-year agreement with Chemist Warehouse.

Wellnex Life is targeting the Australia vitamin and dietary supplements market, which is currently worth an estimated $3.1 billion. It also has plans to expand into the $1.3 billion sports nutrition segment in the future.

Though, it is worth remembering from its lack of success in the infant formula market, that just having a large market opportunity doesn’t guarantee sales. For example, prior to the rebrand and acquisition, Wattle Health recorded cash receipts of just $0.5 million during the third quarter of FY 2021.

Wellnex Life returns to the ASX board today with a total of 321,730,670 shares outstanding. Based on the current Wellnex Life share price, this gives it a market capitalisation of $40.2 million.

Should you invest $1,000 in Wellnex right now?

Before you consider Wellnex, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Wellnex wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. 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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