According to a Bloomberg report, Adobe’s (NASDAQ:ADBE) pending Figma deal could face a roadblock. The report stated that the U.S. Department of Justice (DOJ) is mulling over filing an antitrust lawsuit to block the deal. The antitrust lawsuit could be filed as early as the next month.
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Regulators opine that the deal would provide a significant competitive advantage to ADBE in the design software market. Adobe is already a dominant player in the design software market with its highly popular Photoshop and Illustrator products.
The software giant announced the acquisition of Figma, a cloud-based design platform, in September 2022. The deal valued Figma at approximately $20 billion, which raised eyebrows. ADBE justified the price by stating that the acquisition would significantly accelerate the delivery of Adobe’s Creative Cloud technologies.
During the Q4 conference call, Adobe’s management sounded optimistic and said the Figma close process was progressing as planned.
Along with the DOJ, the European Commission is also assessing the Figma acquisition.
What is the Prediction for ADBE?
Adobe is well-positioned to benefit from the recovery in the software market. However, uncertainty around the Figma deal and the expected dilution from it remains a concern in the short term.
ADBE stock has received seven Buys and 14 Holds, reflecting a Moderate Buy consensus rating on TipRanks. Analysts’ average price target of $378.06 implies 8.94% upside potential from current levels.
Our data shows insiders sold $7.9M worth of ADBE stock last quarter. Further, Adobe has a negative signal from hedge fund managers, who sold 275.6 shares in the previous quarter. Overall, ADBE has a Neutral Smart Score of five.
