What Happened:
Shares of e-signature company DocuSign (DOCU) jumped 5.3% in the afternoon session after Reuters reported that private equity firms Bain Capital and Hellman & Friedman are in competition to acquire the company. According to sources, "The two private equity firms are among the final bidders in the auction for DocuSign...While the investment firms have not joined forces, it is possible that they may partner down the line to clinch a deal." After the initial pop the shares cooled down to $64.09, up 4.4% from previous close.
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What is the market telling us:
DocuSign's shares are very volatile and over the last year have had 12 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 28 days ago, when the company gained 14.3% on the news that the Wall Street Journal reported that the company is exploring a potential sale. According to the sources, discussions are in the early stages, and there's no guarantee of a deal. The company saw increased demand during the pandemic, driven by the need for technology to facilitate virtual signatures on contracts and other documents. However, demand has since normalized as workplaces shifted back to in-person operations and competition from the likes of Adobe continues.
DocuSign is up 12.4% since the beginning of the year, and at $64.09 per share it is trading close to its 52-week high of $67.83 from February 2023. Investors who bought $1,000 worth of DocuSign's shares 5 years ago would now be looking at an investment worth $1,483.
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