Google's deal for Mandiant 'shot across the bow' to Microsoft, Amazon: Wedbush

Sean Gallup/Getty Images News

Google's (GOOG, GOOGL) purchase of Mandiant (NASDAQ:MNDT) for $5.4 billion is likely to be a "major ripple" in the cyber security space and result in more mergers, Wedbush Securities wrote in an investment note.

Analyst Dan Ives noted that Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are likely to be "pressured into M&A" and continue to add to their cloud platforms, with Varonis (NASDAQ:VRNS), Tenable (NYSE:TEN), CyberArk (NASDAQ:CYBR), Qualys (NASDAQ:QLYS), Rapid7 (NASDAQ:RPD), SailPoint (NYSE:SAIL) and Ping (NYSE:PING) as potential acquisition candidates.

"In a massive growth backdrop for cyber security and further tailwinds seen during this Ukraine invasion from Russia bad actors/nation state attacks, we believe today's deal is the tip of the iceberg to a massive phase of consolidation potentially ahead for the cloud space," Ives wrote in a note to clients.

"In a nutshell this deal was a shot across the bow from Google to Microsoft and Amazon with this flagship cyber security acquisition of Mandiant."

Mandiant (MNDT) shares fell more than 3% to $21.72 in premarket trading, while Alphabet (GOOG, GOOGL), Google's parent company, saw its shares tick up fractionally to $2,535.

On Tuesday, Google said it was buying cybersecurity firm Mandiant (MNDT) for $23 per share in cash, a 57% premium to the 10-day trailing volume weighted average price as of Feb. 7, the last full trading day prior to market speculation about potential sale, according to a statement.

After the deal closes, Mandiant will become a part of Google's cloud unit.

On Monday, Mandiant (MNDT) shares jumped on a news report that Google (GOOG, GOOGL) was in advanced talks to purchase the company.

Comments

[omdguy]

'shot accross the bow???

More like a lump shot in the water. What business is going to trust Google with
Enterprise data????

[Shangrila Value]

@omdguy tons of them.

[Tom Gielink]

Google has no doubt been an exceptional Search operation, You Tube is also a wonderful offshoot of search. However their concern for truly efficient sustainable sytsems - by that I mean long term is questionable. Just take Android, the system is reliant on many suspect developers and one never knows what kind off App you are getting, if it is safe and are the payments secure? You never know if your pictures are yours are are they going to suddenly remove them without notice, or at a cost. You Tube despite having many plusses is also sometimes a bit erratic. Advertisers have their ads shortened and Google does not seem to care as long as the cash rolls in.
Amazon is operating a damn near perfect operation and have their finger on the pulse covering every conceivable base. They promised to make the customer King and that is what they have done.
And Microsoft serving almost the entire Online world in one way or another are a remarkable business exhibiting professionalism in every field in which they operate.
They are available Digitally or live to handle any hiccup or threat that rears its head.
That is why companies rely and trust them and ever since Mr Nadella took the reigns it has been an amazing business model serving the community and delivering on its promises. Obviously with a business with such a huge customer base will sometimes have problems - but it is how they attend to them that makes the difference.
To unseat Microsoft or Amazon will need more than just financial muscle.

[dgiinvestor]

@Tom Gielink LOL. Android is great. And the diversity of hardware keeps $GOOG from getting bogged down with supply chain issues.

[maphead]

So you would've thought BUG and CIBR would go up today but nada.

[katmandu100]

Good info.

[Niksurfs]

Let the games begin.....

[Shangrila Value]

So it will be used as a security service for GCP?

[Eauz]

Can't wait until Alphabet buys up Microsoft & Amazon. Tech need some consolidation.

[littlecubbie2019]

Hopefully it gets blocked. No reason to have these companies get any larger.

[Jamjack]

These types of buys should not be blocked. Plenty of competition and it is easier to buy your security company if you are big like these names than build it from the ground. These are bolt on companies for their already in-house departments. These big tech companies are forward thinking as they know the cyber warfare is just ramping up.

Put your stake in the ground with one you research and profit.

[littlecubbie2019]

@Jamjack it’s not about competition. These companies are too large/have too much power. We have seen this with googles YouTube censoring the truth. Making them larger isn’t going to help.

[Gary J is Rich on AMZN]

@littlecubbie2019

You can learn about economies of scale in Econ 101.

[nicholas__t01]

Any thoughts on the companies Ives sees as potential buyouts... either their buyout potential or as a standalone company?

Thanks

[Dodgers19]

Dan Ives is a sell side analyst who incessantly bangs the drum on the same names over and over. Everyone should know that Ives' calls have only been correct about 62% of the time, and he's not ranked high out of all the analysts on the street. I read this just the other day.

[New Adams]

@Dodgers19 - still, 62% better than 50% average hit-or-miss.

[Gary J is Rich on AMZN]

"Analyst Dan Ives noted that Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) are likely to be "pressured into M&A" and continue to add to their cloud platforms"

As if they are not already doing that?