Adobe paring earlier gains amid activist speculation

Oct. 06, 2022 11:59 AM ETAdobe Inc. (ADBE)By: Joshua Fineman, SA News Editor4 Comments

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Robert Giroux

  • Adobe Inc. (NASDAQ:ADBE) pared some earlier gains after rising as much as 2.7% after traders passed around a report from Tuesday that speculated the tools company could be a potential target for an activist.
  • Adobe (ADBE) may be a possible activist target given its recent plunge following the $20 billion purchase of Figma last month that wiped out $25 billion of Adobe's market cap. Adobe is in the 75th percentile of companies most likely to be targeted by an activist investor, according to Insightia’s Vulnerability module.
  • An activist could try to provide an alternative strategy for the company including a stock repurchase and dividend, the report speculated. In addition, an activist may highlight Adobe’s high selling, general, and administrative costs, which are more than double the S&P 500 index average, according to the report.
  • Adobe (ADBE) shares had plunged 20% through Wednesday since the deal was announced last month. Adobe last month saw several downgrades from sell side firms following the announcement of the Figma deal.

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