HubSpot (HUBS) Stock Trades Up, Here Is Why

Max Juang /
2024/05/28 3:15 pm EDT

What Happened:

Shares of sales and marketing software maker HubSpot (NYSE:HUBS) jumped 9.5% in the morning session after CNBC's David Faber confirmed rumors that Alphabet is in talks to acquire the company. Faber added, "There have been many reports about HubSpot being in conversations with Google...My understanding is absolutely true, all stock deal for Alphabet to acquire HubSpot."

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What is the market telling us:

HubSpot's shares are very volatile and over the last year have had 9 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 biggest move we wrote about over the last year was about 2 months ago, when the stock gained 9.4% after Reuters reported that Google expressed interest in acquiring the company. According to sources, Alphabet (Google's parent company) is in talks with investment bankers about a potential offer. 

Following the news, Wall Street analysts weighed in on the development, with Stifel analyst expressing reservations regarding the deal. "We believe this would be heavily challenged by regulators given the DOJ already has two suits pending against the company across its Search business and its Ad Tech practices." Stifel also touched on the potential merits of the deal, noting, "In our view, Google would be able to leverage its rich data assets that are aggregated across Gmail, its market-leading digital advertising products (Search, YouTube, network, etc.), and its small but growing Cloud business (Hubs might entice more GCP usage)....We also believe this acquisition could help Google's position in digital advertising with greater ability to leverage first-party data, all in one platform, as Google looks to purge third-party cookies on Chrome later this year."

HubSpot is up 18.2% since the beginning of the year, and at $647.76 per share it is trading close to its 52-week high of $682.02 from April 2024. Investors who bought $1,000 worth of HubSpot's shares 5 years ago would now be looking at an investment worth $3,485.

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