Despite Tuesday's early selling activity, which resulted in Citrix Systems (NASDAQ: CTXS) stock dropping by about 4% as of mid-afternoon, recent rumors that the cloud enterprise software provider is in search of a buyout have helped push its stock upward by more than 82% this year.
According to the usual "people familiar with the matter" who turn up where rumors are concerned, Citrix has gone so far as to recently hire Goldman Sachs to help it find an appropriate suitor. Unfortunately, Citrix's skyward stock price run of late is apparently making the process of finding a bidder (or group of bidders) difficult. Its current market capitalization of $13.6 billion means it would likely take several investors to fund a deal.
Citrix's recent share price performance -- buyout rumors or not -- is a bit baffling given that last quarter's revenue of $908 million was essentially flat compared to 2015's Q4 sales of $905 million. Citrix has also been streamlining its operations -- a process that has included spinning off its GoTo unit and closing facilities -- but none of that has slowed its rapid stock price appreciation. Nor has management's statement that they are viewing this year with a "conservative outlook." Apparently, investors don't share those concerns.
As per the rumors, interest among potential buyers of Citrix has been fairly limited because of its valuation and the challenges that presents, particularly if it's seeking any sort of premium to its current stock price.
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