PLBY Group (PLBY) is jumping 20% today after the company announced that it was converting 25% of its preferred shares to common stock. Additionally, investment bank Roth/MKM resumed coverage of the shares with a Buy rating.

PLBY owns the Playboy brand.

Conversion of Preferred Stock to Common Shares

The company today announced that it had converted 25% of its outstanding shares of Series B Convertible Preferred Stock into shares of its common stock. Specifically, PLBY converted 7,000 shares of its 28,000.00001 Series B Stock into 3.78 million shares of common stock at a conversion price of $1.85 per share.

The company stated that it had taken this measure in order to streamline its balance sheet and lower its debt load.

Roth/MKM Resumes Coverage of PLBY

The investment bank placed a Buy rating on PLBY because it is upbeat about the changes that the company has made, and it believes that these moves are not yet reflected in the stock price. These changes affect the firm's strategy, operations, and capital structure, according to Roth/MKM, which put a $3 price target on the shares.

The Recent Price Action of PLBY

In the last month, the shares have climbed 35%, while they are up 51% in the last three months.

While we acknowledge the potential of PLBY, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLBY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.