The Bubs Australia Ltd (ASX: BUB) share price will be one to watch today after the infant formula and baby food company released an announcement after the market closed on Tuesday.
The company's shares have been on a tear of late, despite there being no notable news out of it.
In fact, following yet another strong gain yesterday, the Bubs share price has now rocketed an incredible 225% in just the last 30 days.
Why has it rallied so much?
Whilst I do believe that there are some bullish investors betting on the company being the next a2 Milk Company Ltd (Australia) (ASX: A2M) after the signing of several key supply agreements in China and at home in Australia, it appears as though some investors were speculating on Bubs being subject to a takeover approach.
But an announcement out of Bubs after the market closed yesterday has put an end to that speculation.
According to the release, the company is aware of speculation on an investor discussion forum in regards to a potential takeover offer, but confirmed that it has not been approached.
What's next?
Unfortunately I think a lot of Bubs' recent share price gains have come on the back of this speculation.
As a result, I feel it is likely that its shares could face a heavy decline today as day traders exits positions in a hurry.
After all, with revenue of $5 million it is hard to justify its current market cap of approximately $215 million.
