What Happened?
Shares of digital engagement platform ON24 (NYSE: ONTF) jumped 36.9% in the afternoon session after the company agreed to be acquired by Cvent in an all-cash transaction.
The deal, valued at approximately $400 million, stipulated that ON24 shareholders would receive $8.10 per share in cash. This sale price represented a substantial premium for investors. The stock's sharp rise reflected the market adjusting to the value of the acquisition offer.
Is now the time to buy ON24? Access our full analysis report here.
What Is The Market Telling Us
ON24’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for ON24 and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 17.3% on the news that the company reported it had received interest for a potential acquisition and posted strong third-quarter financial results.
In an official filing, ON24 stated its Board was evaluating preliminary, non-binding indications of interest with the help of Goldman Sachs. While the company noted there was no guarantee of a transaction, the news signaled potential value for shareholders. Adding to the positive momentum, ON24 reported third-quarter earnings per share of $0.03 and revenue of $34.6 million, beating analyst estimates on both fronts. The company also highlighted a major new partnership with LinkedIn and noted that nearly one in five customers was paying for its AI solutions. Following the results, an analyst at Baird raised the firm's price target on the shares to $6 from $5.
ON24 is up 23.3% since the beginning of the year, and at $8.02 per share, has set a new 52-week high. Investors who bought $1,000 worth of ON24’s shares at the IPO in February 2021 would now be looking at an investment worth $113.17.
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