What Happened?

Shares of stock photography and footage provider Shutterstock (NYSE:SSTK) jumped 9.3% in the afternoon session after Bloomberg reported that the company (SSTK) is discussing a potential merger with Getty Images. The sources added that talks are ongoing, and it is still possible that a deal won't be finalized.

The shares closed the day at $31.47, up 7.8% from previous close.

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What The Market Is Telling Us

Shutterstock’s shares are quite volatile and have had 16 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 2 months ago when the stock gained 13.3% on the news that the company reported a "beat and raise" quarter. Third-quarter results blew past analysts' revenue, EPS, and EBITDA expectations. Looking ahead, full-year revenue and EPS guidance were both raised, which is always encouraging. Notably, the company completed the acquisition of Envato, which provides the opportunity to onboard more subscribers and accelerate top line growth; overall, this quarter was solid.

Shutterstock is up 7.9% since the beginning of the year, but at $31.47 per share, it is still trading 39.2% below its 52-week high of $51.79 from March 2024. Investors who bought $1,000 worth of Shutterstock’s shares 5 years ago would now be looking at an investment worth $729.65.

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