What Happened?
Shares of video software platform Vimeo (NASDAQ: VMEO) jumped 60.5% in the morning session after the company announced it entered into a definitive agreement to be acquired by technology company Bending Spoons in an all-cash deal.
The transaction values Vimeo at approximately $1.38 billion. Under the terms of the agreement, which received unanimous approval from Vimeo's Board of Directors, shareholders will receive $7.85 in cash for each share of stock they own. This buyout price represents a significant 91% premium over the video platform's 60-day volume-weighted average share price. The deal is expected to close in the fourth quarter of 2025, after which Vimeo will become a privately held company and its shares will no longer be listed for public trading.
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What Is The Market Telling Us
Vimeo’s shares are quite volatile and have had 15 moves greater than 5% over the last year. But moves this big are rare even for Vimeo and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 19 days ago when the stock gained 5.8% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Vimeo is up 19.4% since the beginning of the year, and at $7.74 per share, has set a new 52-week high. Investors who bought $1,000 worth of Vimeo’s shares at the IPO in May 2021 would now be looking at an investment worth $140.64.
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