What Happened?
Shares of devSecOps platform provider GitLab (NASDAQ: GTLB) fell 5.7% in the afternoon session after investors took profits following a significant rally in the previous session, which was fueled by takeover rumors that were later met with skepticism.
The stock had gained over 10% during the last trading session after StreetInsider reported that Datadog was exploring a fresh takeover bid for GitLab. However, a Wolfe Research report cast doubt on the deal materializing, stating they did not believe Datadog would be the ultimate buyer. The decline appeared to be driven by a combination of investors cashing in on the recent gains and new uncertainty about whether the acquisition would actually happen. Neither company had confirmed the takeover reports.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy GitLab? Access our full analysis report here.
What Is The Market Telling Us
GitLab’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 4.9% on the news that President Trump threatened to increase import taxes on Chinese goods, reigniting trade war fears. The threat was in response to China's move to restrict its exports of rare earth minerals, which are critical to high-tech manufacturing in the U.S. The unexpected announcement shattered a monthslong calm on Wall Street, sending major indices tumbling. The S&P 500 dropped around 1.3%, while the tech-heavy Nasdaq Composite fell 2.7%. Investors reacted by selling off stocks, particularly in the technology and retail sectors, amid concerns that escalating trade tensions could disrupt global supply chains and increase costs for companies.
GitLab is down 19% since the beginning of the year, and at $45.70 per share, it is trading 37.5% below its 52-week high of $73.14 from February 2025. Investors who bought $1,000 worth of GitLab’s shares at the IPO in October 2021 would now be looking at an investment worth $439.56.
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