What occurred

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

So what

Wednesday afternoon, Reuters reported that Avid is exploring a possible sale. Citing unidentified “persons familiar with the matter, the news agency mentioned the firm is collaborating with white-shoe investment bank Goldman Sachs on the procedure. It has requested that interested purchasers submit binding presents.

The short article did not mention a possible cost Avid could possibly fetch in a sale. These sources mentioned that it is not assured that a deal will be reached at all.

While the firm is a storied name in its field, prior to the Reuters report its stock cost had fallen by almost 20% year to date. One particular explanation for this is its very first-quarter outcomes, published earlier this month, which missed on each the best and bottom lines. Also, income fell marginally on a year-more than-year basis, and the firm 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 must exercising care with Avid these days. Assuming the short article is correct, it really is challenging to gauge what cost the firm could nab in a sale. That mentioned, Avid continues to be an significant enterprise in its rather restricted field regardless of determined competitors from the likes of Apple and Adobe, and it really 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 solutions: lengthy January 2024 $420 calls on Adobe and quick January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.