Investors dumped Imperva Inc (NYSE:IMPV) after media reports speculated that efforts by the cyber security specialist to sell itself had halted, possibly because the price was not good enough.
The stock tanked nearly 16% to end Wednesday at $39.20, after 9 million shares changed hands.
On October 12, Bloomberg said industry stalwarts such as IBM and Cisco, and buyout specialists Silver Lake Management and Thomas Bravo were interested in acquiring Imperva.
This followed an earlier report in the by Bloomberg on September 23 on much the same lines.
Those hopes have apparently come to nought.
Imperva Inc (NYSE:IMPV) wants more
According to Bloomberg, talks have ground to a halt because the bids received from the interested suitors did not come up to expectations, and that Imperva is seeking a higher acquisition premium.
The result of the rumors, none confirmed by Imperva, has been gut-wrenching volatility in the stock.
The stock gapped up and closed higher by 21% on September 23, on the initial Bloomberg report. On October 12, the stock opened and closed at $50.50, but made a high of $57.24 which was promptly sold into by the smart money.
Yesterday, the stock gapped down at the open and closed 16% lower.
The gyrations mean that the stock spent only a brief interlude above the 200 day moving average (“abandoned baby”) and is now back well below that line.
Imperva Inc (NYSE:IMPV): limited premium?
BTIG managing director hinted October 4 that acquisition premium could be a stumbling block, and that in his view the transaction would likely see only a minimal premium.
“We still think a deal could happen, but believe any premium is limited given where the stock is currently trading,” he commented. At $53.56, the stock was already up 23.43% over the $43.39 level prevailing the day before Bloomberg first reported.
Imperva has itself revised downwards its fiscal year guidance by $50 million (25%) and if growth is slow, buyers are unlikely to pony up a large premium.