What Happened?

Shares of subscription management platform Zuora (NYSE:ZUO) jumped 5.9% in the morning session after the company announced it agreed to be acquired by private equity firm Silver Lake for $1.7 billion or $10.00 per share in cash. The acquisition price represents an 18% premium to the company's closing stock price before any news or speculation of the acquisition was known.

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What The Market Is Telling Us

Zuora’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock gained 15.5% on the news that Reuters reported the company is exploring options, including a potential sale following acquisition interests. According to the report, the company is working with investment bank Qatalyst Partners to advise on a potential deal.

Zuora is up 13.9% since the beginning of the year, and at $9.97 per share, it is trading close to its 52-week high of $10.56 from May 2024. Investors who bought $1,000 worth of Zuora’s shares 5 years ago would now be looking at an investment worth $705.05.

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