What Happened?
Shares of hair care company Olaplex (NASDAQ: OLPX) fell 6.1% in the afternoon session after the company announced its first-ever acquisition, purchasing biotech firm Purvala Bioscience.
The strategic deal aims to combine Purvala's expertise in molecular development with Olaplex's own bond-building technology to drive product innovation. However, the negative market reaction suggests investors may be focused on the potential downsides of the merger.
Analysts point to the inherent risks and uncertainties associated with integrating Purvala's technologies into Olaplex's product line. There are concerns that the expected benefits of the acquisition may not be fully realized and that challenges could arise in aligning the operations and cultures of the two companies, weighing on investor sentiment.
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 Olaplex? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Olaplex’s shares are extremely volatile and have had 49 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 1 day ago when the stock gained 15.4% on the news that Canaccord Genuity upgraded the stock to Buy from Hold and raised its price target to $2.00 from $1.50. The research firm cited brand reinvigoration and a potential return to growth as key reasons for the more optimistic stance. Canaccord Genuity noted that after a difficult period following its IPO, the prestige beauty brand is finally seeing its sales and margins stabilize. The firm believes that investments in marketing, merchandising, and innovation are beginning to yield positive results. Supporting this view, Olaplex's second-quarter sales showed a return to growth, with analysts seeing the potential for positive sales growth in fiscal year 2025. The company's revenue growth was recorded at 2.25% as of June 30, 2025.
Olaplex is down 14.5% since the beginning of the year, and at $1.45 per share, it is trading 44.8% below its 52-week high of $2.62 from September 2024. Investors who bought $1,000 worth of Olaplex’s shares at the IPO in September 2021 would now be looking at an investment worth $58.98.
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