What Happened?
Shares of devSecOps platform provider GitLab (NASDAQ: GTLB) jumped 5.4% in the morning session after acquisition rumors involving Datadog (DDOG) continued to fuel investor interest. The stock's move followed recent volatility sparked by a report suggesting that Datadog was exploring a takeover of GitLab, potentially valuing it at over $60 per share. The speculation had caused the shares to surge significantly in a previous session before pulling back. Adding to the positive sentiment, analysts appeared to maintain their confidence in the company. Cantor Fitzgerald reiterated its Overweight rating on the stock in light of the rumors. Additionally, Morgan Stanley reaffirmed its Buy rating and increased its price target to $60.
After the initial pop the shares cooled down to $47.54, up 4.9% from previous close.
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What Is The Market Telling Us
GitLab’s shares are extremely volatile and have had 35 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 3 days ago when the stock dropped 5.7% on the news that 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.
GitLab is down 15.6% since the beginning of the year, and at $47.54 per share, it is trading 35% 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 $457.61.
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