Hims & Hers Stock Pops after a massive purchase

Health company shares His and her health (NYSE: EL) is up 23.9% this week on news of a major acquisition closing. The stock was up 18.3% for the week as of 2:30 p.m. ET, according to data from S&P Global Market Intelligence.

The biggest news was that Hims & Hers issued 976,341 shares of common stock to acquire Nivagen Pharmaceuticals, which does business as MedisourceRX. The company is a compounding pharmacy that will allow Hims & Hers to bring product manufacturing in-house rather than outsourcing to third parties.

While investors may not be happy about the dilution, strategically, the deal makes a lot of sense. Products can now be produced in-house and Hims & Hers can take that margin. It will also allow the company to be more flexible with what it produces and how products are combined into a single solution.

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