Shares of DocuSign (NASDAQ: DOCU) fell 8.5% on Monday after Reuters reported talks had stalled with two private equity firms as they weighed whether to acquire the online signature services company.
Acquisition talks for DocuSign have cooled
Shares of DocuSign have rallied in recent weeks amid rumors that the e-signature leader was exploring a potential sale. Private equity firms Bain Capital and Hellman & Friedman emerged as potential suitors in the process. But according to three people "familiar with the matter" this week, Reuters says the firms' interest in striking a deal has waned after weeks of talks "over disagreements on how much they should pay" for the company.
What's next for DocuSign stock?
DocuSign boasts a market capitalization of just under $11 billion as of Monday's close, which would potentially make its acquisition one of the largest leveraged buyouts in recent years. DocuSign previously thrived during the pandemic as at-home work accelerated the transition to e-signature platforms. However, shares have pulled back sharply since late 2021 as growth decelerated. Even after rallying nearly 40% from their 2023 lows, shares of DocuSign are down around 15% over the past year.
All told, DocuSign will likely be just fine even if acquisition talks fall through; the company's top-line growth has stabilized, with current guidance implying 9% year-over-year growth in 2023. The company also appears to be on track to achieve its first-ever full-year net profit.
But with hopes of a juicy acquisition premium fading, it's hardly surprising to see the stock pulling back in response today.
Should you invest $1,000 in DocuSign right now?
Before you buy stock in DocuSign, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and DocuSign wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of February 5, 2024
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DocuSign. The Motley Fool has a disclosure policy.
