Skivvies and clean tech. Has the market ever seen such an odd couple? So it is with Naked Brand (NASDAQ:NAKD). In the days following the announcement of news that the lingerie and swimwear retailer found a “disruptive opportunity in the clean technology sector,” investors had a “WTF?” moment that sent NAKD stock down almost 21%.

Management’s announcement, sans important details, made the whole concept seemed ludicrous. Yet the analysis regarding the future implications for NAKD stock appeared largely measured.

Take for instance Barron’s Sabrina Escobar. In discussing the sharp move of NAKD stock on the disclosure that Naked Brand CEO Justin Davis-Rice had found said “disruptive opportunity,” the only hint of an opinion was this line: “While the move into clean technology may be unexpected for a swimwear retailer, Davis-Rice said he had always been attracted to ESG [environmental, social, governance] opportunities.

“May be unexpected?” This is the kind of understated plot twist that sees evangelical pastors use a hallowed name in vain, only to sheepishly apologize to passersby later. Out of all the news events that I anticipated concerning NAKD stock, I can safely say that this wasn’t one of them.

Still, a method to the madness exists. Certainly, I wouldn’t recommend conservative investors piling into NAKD stock. However, from perusing social media forums, it appears that speculators are betting on a buy-the-rumor, sell-the-news scenario. That is, they’re positioning themselves now in Naked shares hoping for that next corporate disclosure that will skyrocket the stock.

In that sense, I’ve got to give credit where it’s due. Honestly, under this play, I don’t think it matters what Naked announces. So long as it makes reasonable sense, there’s a chance that NAKD stock will jump. If it does, then these same bulls will probably dump it like there’s no tomorrow.

NAKD Stock Now a Pure-Risk SPAC Trade

So, I’ve got to take back some of my criticisms about NAKD stock. There’s a reason why so many speculators like it. I just don’t think it’s a particularly good one.

In my opinion, with this obscure pivot to clean technologies and ESG, NAKD stock has become a sort of special purpose acquisition company. Like a pre-merger SPAC, you’re betting blind, hoping that its sponsor(s) will find a viable target enterprise. Indeed, Naked is very much like a SPAC since both entities are teasing the viability of a business combination without giving away critical details.

But here’s the thing: if you had a choice, you might be better off with the SPAC than NAKD stock.

Based on how pre-merger SPACs are structured, investors are trusting that sponsors will find an appropriate deal. But the difference between a SPAC and NAKD stock is that the former is not a purely blind trust. If a SPAC fails to find a merger target, investors can get their money back. Per the Securities and Exchange Commission:

[For SPAC shares purchased in the open market] you are only entitled to your pro rata share of the trust account and not the price at which you bought the SPAC shares on the market. For example, if a SPAC had an IPO at $10 per share, but you bought 100 SPAC shares on the open market at $12 per share, the shares you purchased are associated with a trust account balance of about $10 per share, so your share of the trust account would be worth about $1,000 (not the $1,200 you paid for your shares).

The opposite is also true, meaning that buying SPACs below the initial offering price basically facilitates risk-free yield. Plus, you can back out of a deal you don’t like.

With SPACs, you have protection. With NAKD stock, you don’t.

Be Careful in Your Approach

I’m not here to dissuade anyone from buying NAKD stock. If you believe that there will be any army of people that will buy the ESG hype which you’ve already positioned yourself early in, then by all means, buy away.

But as I just mentioned, the opposite is true. If Naked’s pivot to clean technologies and ESG turns out to be a dud, you’ll probably lose big. And the worst part is that you would have jumped out of the plane without a parachute.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.