Starboard Value has acquired a 6.5% stake in web services firm GoDaddy, Inc. (GDDY). Citing regulatory filings with the U.S. Securities and Exchange Commission, Reuters reports the stake purchased by the activist investor was valued at about $800 million. GDDY shares rose 0.18% to close at $82.50 on December 28.
GoDaddy is a web service company specializing in providing domain name registration and web hosting services. It offers website building, hosting, and security tools. GoDaddy’s earnings report for Q4 2021 is scheduled for February 16, 2022.
Starboard Value Investment
According to regulatory filings, the activist investor is open to increasing or decreasing its stake in GoDaddy, depending on overall market conditions. Starboard Value insists it made the investment to take advantage of the attractive investment opportunity as GoDaddy’s shares were undervalued.
The activist investor is expected to push GoDaddy to improve its performance following the investment. The web services firm has seen a significant increase in online traffic in recent months. A shift to digital operations in the wake of the COVID-19 pandemic has been the main catalyst behind the growth in online traffic.
Earlier this week, Truist Financial analyst Naved Khan reiterated a Buy Rating on GoDaddy with a $112 price target, implying 35.76% upside potential to current levels. According to the analyst, the investment adds another positive layer to the GoDaddy story.
Consensus among analysts is a Moderate Buy based on 5 Buys and 3 Holds. The average GoDaddy price target of $95.63 implies 15.92% upside potential to current levels.
Alibaba Is an Attractive Value Play
Sorrento: There’s Huge Upside in Store for This Overlooked Stock, Says Analyst
Coinbase: Investors Should Be Wary of the Risks