[16 Sep] ADBE plummets on $20 Billion Figma Takeover

15 thg 9, 2022

A 15% descend for a blue chip ticker like ADBE in a day is, well, simply crazy. Sure, ADBE fell short in their recent earnings report in terms of revenue and their fourth quarter forecast, but the huge gap down was largely driven by ADBE's expensive deal to acquire FIGMA.

Personally, the clear victor of the deal was FIGMA. Even with FIGMA's expectations of 2022 revenue to double to 400m, ADBE is essentially paying 50x for what FIGMA is worth now. As of writing, ADBE market capitalisation stands at 173Bn, which means that they are using >10% of their market cap to purchase FIGMA. THAT is a huge bet.

Comparing their P/E to MSFT (albeit not a perfect competitor), ADBE's valuation still looks expensive (36.28) vs MSFT (26.15). While there are more research to be done, there is cause to believe that the short term outlook for ADBE will remain bearish. However, based on the technical assessment there are no swing setups for me yet. ADBE will remain in my watchlist for a potential short setup, awaiting a potential consolidation/retracement to determine new support and resistance levels before deciding if the risk to reward in this case is favourable.