Mon. Jun 5th, 2023

What occurred

Avid Technologies (AVID -three.90%), a storied maker of film-, video-, and audio-editing options, is apparently for sale, and investors have grow to be excited about the prospect of a profitable deal. As a outcome, as of early morning Friday the company’s share cost had climbed by virtually 19% week to date, according to information compiled by S&ampP Worldwide Marketplace Intelligence. 

So what

Wednesday afternoon, Reuters reported that Avid is exploring a prospective sale. Citing unidentified “folks familiar with the matter, the news agency mentioned the organization is collaborating with white-shoe investment bank Goldman Sachs on the method. It has requested that interested purchasers submit binding provides.

The write-up did not mention a prospective cost Avid may well fetch in a sale. These sources mentioned that it is not assured that a deal will be reached at all.

Though the organization is a storied name in its field, prior to the Reuters report its stock cost had fallen by practically 20% year to date. 1 purpose for this is its initial-quarter final results, published earlier this month, which missed on each the leading and bottom lines. Also, income fell marginally on a year-more than-year basis, and the organization flipped to a net loss according to GAAP accounting requirements.

Neither Avid nor Goldman Sachs has however officially commented on the Reuters report. 

Now what

As ever with sale or buyout speculation, investors really should workout care with Avid these days. Assuming the write-up is precise, it is challenging to gauge what cost the organization could nab in a sale. That mentioned, Avid continues to be an significant company in its rather restricted field in spite of determined competitors from the likes of Apple and Adobe, and it is realistic to anticipate it’ll sell at a premium if it finds an enthusiastic purchaser.

Eric Volkman has positions in Apple. The Motley Fool has positions in and recommends Adobe, Apple, and Goldman Sachs Group. The Motley Fool recommends the following possibilities: extended January 2024 $420 calls on Adobe and quick January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.

By Editor

Leave a Reply