DocuSign Shares Spike on Rumors of Potential Sale

DocuSign (DOCU), a leading provider of electronic signature software, is reportedly considering a sale, according to the Wall Street Journal. The news sent the company’s shares up by nearly 20% on Friday, as investors speculated on the potential buyers and valuation of the deal.

DocuSign has hired advisors to explore a possible sale, the Journal said, citing people familiar with the matter. The company has not received any formal offers yet, and there is no guarantee that a deal will happen, the sources added.

DocuSign’s software allows users to sign and send documents online, eliminating the need for paper and ink. The company has benefited from the shift to remote work and digital transactions amid the Covid-19 pandemic, as more businesses and consumers adopted its services.

DocuSign Shares Spike on Rumors of Potential Sale
DocuSign Shares Spike on Rumors of Potential Sale

The company reported revenue of $469.1 million for the first quarter of fiscal 2022, up 58% year over year, and earnings of 44 cents per share, up 267% year over year. Both figures beat analysts’ expectations, as did the company’s guidance for the second quarter and the full year.

DocuSign has a market capitalization of about $45 billion, based on Friday’s closing price of $233.24. The company went public in 2018 at $29 per share, and has since grown rapidly, expanding its product offerings and customer base.

Some of the potential acquirers for DocuSign could include large technology companies, such as Microsoft (MSFT), Salesforce (CRM), Adobe (ADBE), or Oracle (ORCL), analysts said. These companies could leverage DocuSign’s technology and customer relationships to enhance their own cloud-based software platforms and services.

However, a sale of DocuSign could also face regulatory hurdles, as the company dominates the e-signature market, with an estimated 70% share, according to research firm Gartner. The company competes with smaller rivals, such as HelloSign, SignNow, and PandaDoc, as well as some of the aforementioned tech giants.

DocuSign has not commented on the report of its possible sale, and has not announced any changes in its leadership or strategy. The company is currently led by interim CEO Mary Wilderotter, who replaced Dan Springer in June. Springer stepped down after four years at the helm, citing personal reasons.

DocuSign’s stock has gained more than 300% since its IPO, and more than 80% in the past year. The company is expected to report its second-quarter results on September 2.

Leave a Reply

Your email address will not be published. Required fields are marked *