Why did the Step One (ASX:STP) share price rocket 10% today?

Why are Step One shares stepping up today?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published December 21, 2021 3:06 pm AEDT

It's been a wild and exciting day of trading for the Step One Clothing Ltd (ASX: STP) share price. Step One shares are currently trading at $2.41 each, up a healthy 6.64% on yesterday's close. But earlier in the trading day, this ASX small-cap share hit an intra-day high of $2.49 a share. That put the Step One share price up just a tad over 10% at the time.

So why have shares of this clothing company been so hot this Tuesday?

Well, let's get this out of the way. It's not clear. Oddly for such a big move, there has been no official news or major announcement out of the company today. In fact, we haven't had any ASX announcements from this company since 2 November.

Boy in business suit smiles with arms crossed and rockets attached to his back representing the rocketing BrainChip share price — Image source: Getty Images

Step One steps too low?

But that was just a day after Step One actually underwent its initial public offering (IPO). Yes, Step One IPOed back on 1 November. As we reported at the time, Step One's IPO resulted in the company raising $81.3 million from the placement of its shares at a price of $1.53 each. Its IPO was a lucrative event, with Step One shares rising roughly 86% after just two days of trading, netting its founder Greg Taylor a paper profit of a cool $150 million.

But after an initial few weeks of success that saw Step One shares top out at $3.13 each by 19 November, the company has come back to earth somewhat. Today's share pricing puts Step One at around 20% below that all-time high, even after the healthy jump we have seen today.

But in its short life so far, Step One has already impressed some ASX investing experts. As we covered late last month, broker Morgans likes what it sees at Step One. This broker rated the company as a 'buy', with a 12-month share price target of $3.20. Morgans likes the fact that Step One has unabashed global ambitions, and is watching the company's US rollout keenly.

Just before the start of December, my Fool colleague Tony also went through Wilson Asset Management analyst Shaun Weick's bullish views on Step One. Mr Weick pointed to the company's plans to expand into both sporting and women's clothing and is also excited about the company's global expansion plans.

So perhaps some of this sentiment has finally gotten through to investors, who just yesterday would have watched Step One sink to a new post-IPO low of $2.18 a share.

Whatever the reason for today's share price gains, it's certainly a great day to own Step One shares.

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