Adobe Stock (NASDAQ:ADBE) has fallen by more than 14%. Thursday, the creative software giant said it would purchase Figma, a provider of collaborative design platforms, for $20 billion.
Adobe (ADBE) stated that the Figma deal would be split 50/50 between cash and stock. Figma Chief Executive Dylan Field and company employees would also receive 6M additional restricted Adobe stock (NASDAQ:ADBE) units from Adobe (ADBE), which will vest over four years following the deals completion.
Effects on Adobe Stock and the Market
Adobe (ADBE) shareholders went into selling mode early following the announcement of the agreement, as the firm said that it expected Figma to contribute to the businesss profitability by the third year after the conclusion of the purchase. This statement implied that Adobes (ADBE) earnings might negatively affect the deal for two years.
Figma is an industry leader in what it refers to as a web-first collaborative design platform. This platform gives workers the ability to work on a variety of projects together while using digital tools.
Adobe (ADBE) stated, in conjunction with the announcement of its acquisition of Figma, that it anticipates reporting earnings for its fiscal fourth quarter of $3.50 per share on sales of $4.52 billion, excluding the impact of any one-time items. This compares to the consensus estimate of $3.47 per share on $4.6 billion in revenue from market analysts.
In addition, Adobe (ADBE) said that it made $3.40 per share for its fiscal third quarter, excluding one-time items, on revenue of $4.43 billion. This compares to the consensus estimate of profits of $3.34 per share on revenue of $4.44 billion from market analysts.
Early this week, a few investment experts on Wall Street downgraded shares of Adobe (ADBE), just in time for the business to announce its quarterly profits.
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