Why did adobe stock price fall? It acquired figma and basically has no better competition now. Still the price fell by 20%. Enlighten me. #faang
That’s common with acquisitions.
- Dilution. - Cash is getting taken out of the business. - Cash was certain, the new business isn't. In general, market values certainty and punishes uncertainty. It remains to be seen if Adobe will recover that 20B in much less time than it would, had it invested in SPY. Over time, as new information appears, the market might reevaluate the price.
Always happens in these situations. Acquired company goes up, acquiring company goes down
When two companies merge the bigger company's stock falls many a time. The issue is more often than not we observed issues in integrating the products between them. The top level management leaves after merging etc. It is difficult to integrate a new company of a very large size with another even larger company. People on both sides clash on the company culture etc. So essentially investors don't believe in these mergers most of the time.
In my mind, an acquisition typically means the company initiating the merger doesn't know how to build stuff themselves. 🤷♀️ It wasn't like they were buying off their competition. Most companies don't use Illustrator anymore.
Yes that's true. Palo alto/ Cisco do the same. They don't really know how to make software so buy a bunch of startups then merge them to build some product.
Wall Street might have reacted to the cost of this acquisition
Acquisition and earnings. Their earnings weren’t great either
Read this, the market thinks they overpaid for Figma. https://tomtunguz.com/figma-acquisition/
Is it good time to buy some in this dip and hoping for high in the future ?
I am joining adobe for the same reason
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Stock was super strong in past 5 years. Either it was overvalued or now it’s a great time to buy
Said by someone who knows basically 0 about the stock market