California-based customer engagement platform Twilio, Inc. (NYSE: TWLO) and communications technology provider Syniverse have concluded the strategic partnership that they had announced in February. As per the terms of the agreement, Twilio has invested $750 million in Syniverse for the latter’s common equity shares.
Following this deal, Twilio has become a significant minority shareholder of Syniverse.
Simon Khalaf, Twilio’s Senior Vice-President and GM of Communications Platform, said, “We are pleased to have closed this partnership and investment to accelerate the next wave of innovation in mobile communications and drive long-term growth.”
Following the announcement on Monday, TWLO stock dropped over 10% to close at $99.68.
According to TipRanks’ Risk Factors tool, Twilio was concerned that its quest to acquire or invest in companies might impact its stock price.
The tool also highlighted the company’s plan to invest in Syniverse. It quoted Twilio, which said, “We also may enter into relationships with other businesses to expand our products and platform, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies, such as our recent proposed minority investment of $500 million to $750 million in Syniverse Corporation.”
On TipRanks, the risk was mentioned in the Corporate Activity and Growth segment under the Finance & Corporate risk category. This shows that investors can choose TipRanks’ Risk Factors tool to prepare ahead and benefit from the stock volatility triggered by an announcement.
Stock Rating
Based on 21 Buys and two Holds, the stock has a Strong Buy consensus rating. TWLO’s average price target of $216.95 implies 117.7% upside potential from current levels. Shares have lost 66.5% over the past year.
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