What occurred

Avid Technologies (AVID -three.90%), a storied maker of film-, video-, and audio-editing options, is apparently for sale, and investors have develop into excited about the prospect of a profitable deal. As a outcome, as of early morning Friday the company’s share price tag had climbed by pretty much 19% week to date, according to information compiled by S&ampP International Market place Intelligence. 

So what

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

The report did not mention a prospective price tag Avid could fetch in a sale. These sources mentioned that it is not assured that a deal will be reached at all.

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

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

Now what

As ever with sale or buyout speculation, investors need to workout care with Avid these days. Assuming the report is precise, it is challenging to gauge what price tag the corporation could nab in a sale. That mentioned, Avid continues to be an significant organization in its rather restricted field in spite of determined competitors from the likes of Apple and Adobe, and it is realistic to count on 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 alternatives: extended January 2024 $420 calls on Adobe and quick January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.