2 Companies that Should be Acquired
Mergers and acquisitions are always a touchy subject to write about. If you look back, there actually aren’t many acquisitions that have been as successful as we’d like to think. It shouldn’t come as any surprise that amalgamating two companies into one entity is a difficult thing to do. But there does come a time in a company’s lifetime where in its current capacity, it seems to have just run its course. Without innovation, expansion, and an influx of capital, a company can remain stagnant and these do not make for very good investments. Here are two companies that I think could benefit by being acquired and consolidated into a larger corporation.
DocuSign (NASDAQ:DOCU)
It wasn’t too long ago where we all thought DocuSign would turn into a SaaS beast. The pandemic was tailor-made for DocuSign, and yet, it never seemed to be able to take full advantage of it. Fast forward to the present day where the company is still showing incremental growth, but not at the same rate you would think. In the most recent quarter, DocuSign showed a 6.0% decline in earnings on a year over year basis, although they still came in better than what Wall Street expected. Revenues and billings also came in higher, and the stock popped by more than 10% in what was the company’s best results in some time. But DocuSign shareholders are likely still wondering what the company can do to return to its 52-week high price of just below $300.00 per share. Maybe get acquired? Off the top of my head I think a company like Microsoft (NASDAQ:MSFT) could integrate DocuSign pretty smoothly. In fact, the two companies already work well together and taking on DocuSign could be Microsoft’s way of challenging Adobe (NASDAQ:ABDE) in the digital signature market. Wishful thinking or a match made in heaven? Your move, Microsoft.
Pinterest (NYSE:PINS)
Pinterest has seen a sudden surge in investor confidence over the past few months. One of the reasons is because activist investors Elliot Management took an 11% stake in the company. Elliot has done wonders for other companies in the past and they obviously see some potential in Pinterest. More recently, Wolfe Research provided an Outperform rating on Pinterest and a $28.00 price target. In just a few days since that upgrade, Pinterest has already seen its stock close at a price of $25.55. People seem to still believe in Pinterest but what exactly is different this time? I still think the company needs a direction or goal for the platform to really take off. It’s a cool idea but it really just leads users to other websites. Until Pinterest can build something within their own ecosystem, I don’t see what the appeal is to other users. Now, if we can integrate Pinterest into a platform like Amazon (NASDAQ:AMZN), then I think we’re onto something.
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