Zendesk slumps on $4 bln acquisition of SurveyMonkey parent

Momentive Global

29/10/2021 14:20

** Software services co Zendesk Inc  ZEN.N  plunges 19.4%
premarket to $95.8 - on course to open at its lowest in over a
year
    ** On Thursday, ZEN posted Q3 results that topped estimates
and announced acquisition of Momentive Global Inc  MNTV.O ,
owner of popular SurveyMonkey platform, for nearly $4 bln
 urn:newsml:reuters.com:*:nL4N2RO5WH
    ** At least three brokerages downgrade ZEN and eight
brokerages cut PT 
    ** ZEN set for the worst session in over 5-1/2 years; MNTV
slides 10% to $22.38 - set for its sharpest one-day loss in
eight months
    ** "ZEN reported solid 3Q21 results and provided an
encouraging outlook for 4Q21... However, ZEN's sizable,
all-stock acquisition of Momentive is thesis-changing" -
Jefferies, downgrading to "hold" from "buy"
    ** Adds that MNTV is growing at a slower rate than ZEN and
the deal "significantly" alters ZEN's long-term trajectory 
    ** "MNTV deal seems to be out of left field and we think
many investors are headscratching the rationale. Not much color
was given on strategy" - Cowen; it cuts PT to $140 from $185
    ** Piper Sandler cuts to "neutral" from "overweight" on
near-term integration risks and potential shareholder dilution,
awaits better visibility into combined growth trajectory   
    ** YTD, ZEN down ~17% vs MNTV's 2.5% decline

 (Reporting by Anisha Sircar)
 ((Anisha.Sircar@thomsonreuters.com))