What occurred

Avid Technologies (AVID -three.90%) , a effectively-identified maker of film, video and audio editing options, is apparently up for sale, and investors have develop into excited about the prospect of a profitable deal. As a outcome, because early Friday morning, the company’s share cost has risen almost 19% year to date, according to information compiled by S&P International Market place Intelligence.

So what

On Wednesday afternoon, Reuters reported that Avid was exploring a possible sale. Citing unidentified “persons familiar with the matter,” the news agency mentioned the organization is operating with investment bank White Footwear Goldman Sachs to the method. Requests that interested purchasers submit binding provides.

The write-up did not mention the possible cost Avid could fetch in a sale. These sources mentioned there was no assure that a deal would be reached at all.

Despite the fact that the organization is a household name in its field, just before Reuters reported its share cost has fallen by almost 20 % year to date. One particular of the motives for this is the initially quarter final results, released earlier this month, which missed each the leading and bottom lines. Also, revenues have been down slightly from the earlier year, and the organization reversed to a net loss beneath GAAP accounting requirements.

Neither Avid nor Goldman Sachs have but to officially comment on the Reuters report.

Now what

As usually with speculation about a sale or buyout, investors really should be wary of Avid these days. Assuming the write-up is precise, it is difficult to estimate what cost the organization could fetch in a sale. Nonetheless, Avid continues to be an vital company in its rather restricted field in spite of determined competitors from comparable ones Apple and Adobeand it is realistic to anticipate that it will sell at a cost if it finds an enthusiastic purchaser.

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

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