Normally, a company’s plan to go to a tech conference and show off its latest developments is a good thing for investors, who reward the stock accordingly. But for cloud communications stock RingCentral (NYSE:RNG), it turned out to be just the opposite. It plans to avoid a tech conference, and investors visibly cheered, sending share prices up over 3% in Thursday afternoon’s trading.
RingCentral was in line to hit the Barclays Global Technology Conference, which took place on Wednesday, but instead begged off as its Chief Financial Officer, Sonalee Parekh, came down with an illness. That, in turn, fired up the rumor mill, and some figured that not showing up for a conference was basically another way of saying, “We’re about to get bought out,” or something similar. Consequently, shares jumped higher, as RingCentral has already been the target of rumors suggesting a potential deal may be coming soon.
Something Might be Afoot Indeed
While this rumor may or may not be true, it seems like something is up. Parekh wasn’t just ill for a conference; she’d also been spotted selling shares. A recent Form 4 filing revealed that Parekh now has around 216,000 shares of RingCentral stock after selling 51,962 shares, worth roughly $1.56 million. Parekh’s sale was just one of several in the last month, though these are considered “uninformative” sales.
Is this a sign that someone’s looking to buy RingCentral? Not necessarily. In fact, it’s almost a sign someone isn’t looking to buy, as a buyout would likely come with some kind of premium that would make current shares worth more. But it’s something to keep in mind, all the same.
Is RNG a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RNG stock based on eight Buys and nine Holds assigned in the past three months, as indicated by the graphic below. After a 10.22% loss in its share price over the past year, the average RNG price target of $39.29 per share implies 21.72% upside potential.
