![]() It could also be because, with such elevated interest rates, investors might think Adobe is overpaying for a software company that may not yet be profitable. Part of the decline could also be attributed to the uncertain macro environment, with elevated inflation leading to outsized interest rate hikes that often ding tech-oriented growth stocks such as Adobe. Entertainment Headlines Today Tue-2 001 and 002 Eniola Badmus hails Davido and Chioma - Kemi Filani. The S&P 500 was down 6.2 and the Nasdaq fell 4. ![]() While the company beat adjusted EPS estimates, it gave fourth-quarter revenue guidance of $4.52 billion, which was short of consensus estimates for $4.59 billion. 2018 was a record-setting year for stocks, but it’s one investors would rather forget. Part of that could be due to Adobe's third-quarter results, which were also announced on Thursday. Wall Street recoiled Tuesday with the Dow Jones industrial average nosediving more than 1,200 points after a new government report showed that consumer prices continued rising in August. While Adobe's deal for Figma may make sense in the long-run, as it turns what was a fierce competitor into one of Adobe's new weapons for growth, investors aren't showing enthusiasm for the deal in the short-term. The company expects the deal to close in 2023, and said it expects the business combination to be accretive to its adjusted earnings per share after three years. "With gross margins of approximately 90 percent and positive operating cash flows, Figma has built an efficient, high-growth business," Adobe said in a press release. ![]() Adobe will be funding its deal for Figma with a combination of both cash and stock. The company is expected to register more than $400 million in annual recurring revenue this year. A CNBC report revealed that tens of thousands of employees at Microsoft were heavily using Figma's cloud-based software platform, which tested its long-running relationship with Adobe.įigma was founded in 2012 and was last valued at $10 billion in 2021. Shantanu Narayen, CEO of Adobe Abhijit Bhatleka/Getty Skye Gould/InsiderĪdobe stock plunged 15% on Thursday after it announced a $20 billion deal to acquire Figma.įigma is a fast-growing collaborative design competitor that was last valued at $10 billion in 2021.Īdobe expects the Figma deal to be accretive to its adjusted earnings per share after 3 years.Īdobe stock plunged as much as 15% on Thursday after the company announced a $20 billion deal to acquire privately held Figma and reported earnings that revealed a soft fourth-quarter outlook.įigma is a fast-growing software company that offers collaborative design tools for businesses, directly competing with and taking market share from Adobe.
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