For Citrix Systems (CTXS) investors, the world is about to change substantially. Owning a share of Citrix Systems is about to change into a cash settlement soon following a buyout offer. With limited time left to actually buy Citrix shares and a ceiling now largely established, I remain neutral on the company overall. While, of course, there’s still a company to discuss.
Citrix Systems’ last 12 months in share prices is mostly a downhill slope, though downhill largely in stages. The company spent most of February, March, and almost all of April, averaging around $135, with most days’ closing prices in the $130 to $140 range.
As April departed, so too did any hope of breaking $140. The company took about a week to drop to around $118, and it remained close to that mark until late July.
Another drop kicked in with the end of July, though this time, the resulting doldrums posed a recovery with September. Another drop hit in October and continued through much of December. A recovery pulled the company back to levels seen in October, which is where we are today.
The latest news will largely remove Citrix Systems from an investor’s field of options. The company will be taken private thanks to an acquisition deal between itself and the coalition effort of Elliott Investment Management LP and Vista Equity Partners.
The deal, an all-cash arrangement valued at $16.5 billion, calls for current Citrix shareholders to be paid $104 per share. That’s somewhat less than the company was valued at just on Friday; the company closed at $105.55 that day.
The finalized acquisition will see Citrix become part of Tibco Software, part of Vista’s operations. Citrix will retain its name as well as its headquarters in Fort Lauderdale, reports note.
That’s All She Wrote at Citrix
Right now, oddly enough, Citrix Systems could be considered a good buying opportunity. It will be as long as the price remains under $104 per share. The buyout that will follow will automatically result in a payout of $104 for every share. So anyone who buys in at, say, $101.50 will get a $2.50 per share profit. With some trading systems, sales commissions may not destroy those gains.
Aside from an attempt to play the system for what amounts to pocket change, there’s not a lot of reason to buy Citrix. Citrix will be private soon. Current shareholders will receive a settlement at the agreed-upon rate. If someone were able to afford, say, a couple million shares, it might be a noteworthy opportunity.
Aside from that, there’s not much there. Moreover, it’s impossible to buy in on Vista Equity Partners, which owns Tibco—and now Citrix—so that’s not an avenue to pursue either.
Those looking for an income investment might have had a good thing in Citrix, as Citrix’s dividend history was fairly solid. There was even a small hike in March 2021, which would have been welcome for investors at the time.
Wall Street’s Take
Turning to Wall Street, Citrix Systems has a Moderate Sell consensus rating. That’s based on one Buy, three Holds, and four Sells assigned in the past three months. The average Citrix Systems price target of $93.50 implies 8% downside potential.
Analyst price targets range from a low of $75 per share to a high of $120 per share.
Concluding Views
Citrix Systems might have been a good investment. Its stock was a bit volatile, going from just over $140 to just under $80 in about six months. However, the recovery made before the sale would have been enough to give investors hope. Throw in a decent, reliable dividend—that didn’t grow much, but still—and there were possibilities there.
The buyout, meanwhile, precludes most of those possibilities. So for current Citrix investors, enjoy your buyout; the value may be less than you paid for it, but not if you bought in recently.
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