Here’s why the Bubs (ASX:BUB) share price is down 4% on Monday

The infant formula company’s share price is falling today despite silence from the company.

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The Bubs Australia Ltd (ASX: BUB) share price is falling today, despite no news having been released by the company.

In fact, the last time the market heard price-sensitive news from Bubs was over a month ago when it announced it was to launch in the United States.

Right now, the Bubs share price is 48 cents, 4% less than its previous closing price of 50 cents.

Bubs’ fellow baby formula manufacturer A2 Milk Company Ltd‘s (ASX: A2M) share price is also falling today. It’s down 5.31%.

Let’s take a look at what could be driving the Bubs share price down today.

The latest from Bubs

Although there’s no obvious reason for today’s share price drop, the company was hit with a bearish broker note last week.

Bubs is famously reliant on daigou networks transporting its infant formula products to China. Recently, some market watchers predicted Bubs may see increased business after China adjusted its policy to allow its citizens to have up to 3 children.

However, as The Motley Fool Australia reported over the weekend, analysts at Citi have retained a sell rating and a 35-cent price target on the baby food and formula manufacturer.

The broker said the expected increase in China’s birth rate will likely occur in regions that rely on locally-made formula brands.

We haven’t heard anything from Bubs since 18 June when it announced it will be stocked in the United States.

The company’s products will be sold under the brand Aussie Bubs. They will be available on Walmart Inc’s (NYSE: WMT) website and through Amazon.com Inc. (NASDAQ: AMZN).

As part of its entry into the United States market, Bubs is launching a subsidiary named Aussie Bubs.

Bubs share price snapshot

2021 hasn’t been a good year so far for the Bubs share price.

Right now, it’s around 20% lower than it was at the start of the year. It has also fallen 53% since this time last year.

The company has a market capitalisation of around $294 million, with approximately 612 million shares outstanding.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended A2 Milk, Amazon, and 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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