An Investing.com source has told the financial platform and news website that RingCentral approached 8×8 about a possible take-over.
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RingCentral is allegedly working with an investment bank to review the implications of a potential transaction.
No reports have surfaced yet as to 8×8’s position and whether they are open to a sale.
UC Today reached out to RingCentral for a comment and received the following written response: “We (RingCentral) do(es) not comment on rumours or speculation.”
At the time of writing, 8×8’s stock price is trading at around $3.92, down from $21.3 this time last year. The past month has seen the company’s share price creep up 80 cents from $3.12.
If the rumours are true, 8×8 could be reluctant to sell as their share price puts them in a weak bargaining position on paper, which they may not feel accurately reflects the company’s true value.
On the other hand, if 8×8 are not feeling optimistic about the future, this could be seen as the perfect get-out-of-jail-free card.
Recent finances may not be a reliable indicator, however, as RingCentral would not have appeared to have been in a position to make such an offer.
Earlier this month, RingCentral announced that 10% of its workforce is being laid off in order to weather the macro-economic storm pounding the technology sector at the moment.
Vlad Shmunis, Founder, Chairman, and CEO at RingCentral, spoke about the company’s mass layoffs on its Q3 2022 earnings call:
“While we recently made the extremely difficult decision to further rationalize our workforce, we believe this will allow us to be more agile and better align our course with our strategic priorities in the current macro environment.
“This decision was not made lightly, and we understand the impact this has on our people and their families. We’re taking meaningful action to help ease the transition for our impacted employees.
“We want to underscore how grateful we are for their hard work and all their contributions. RingCentral would not be where we are today without them.”
In spite of the company making layoffs, it was not the gloomy financial position you might imagine. The company’s Q3 results exceeded the high end of guidance across key metrics. Total revenue for RingCentral’s third quarter was $509 million, which is an increase of $94 million compared to Q3 2021.
It seems then that while there are major reasons for both sides not to engage in an acquisition deal at this time, there is also a chance that this is an affordable and profitable option for RingCentral and a saving grace from 8×8’s perspective.
UC Today will continue to follow this story and provide updates as it evolves.
