Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why 8x8, Inc. Shares Dropped

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of 8x8, (NASDAQ: EGHT  ) finished down 7% today after the voice over Internet Protocol specialist announced a secondary stock offering to fund its acquisition of Voicenet Solutions for $18.4 million.

So what: Voicenet Solutions is one of the leading providers of VoIP communications in the U.K., but the additional stock offering will raise about $125 million for the tech company, far more than the $18.4 million needed to buy Voicenet, so there seem to be other cash needs aside from the acquisition. In its press release announcing the stock sale, 8x8 made no reference to its intentions for the additional funds, but the sale will dilute current shareholders by about 15% so today's significant drop in share price seems understandable.

Now what: Seeing as shares had gained 75% since March before today's fall, the timing of the secondary offering seems understandable. Shares have jumped nearly 2,000% since the recession, but they've crashed before. 8x8's balance is strong, and profits are growing. I'd expect more potential acquisitions with the upcoming cash infusion. This could be a good opportunity to buy on the dip.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2722250, ~/Articles/ArticleHandler.aspx, 9/28/2016 1:27:14 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,206.15 -22.15 -0.12%
S&P 500 2,155.97 -3.96 -0.18%
NASD 5,294.69 -11.03 -0.21%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 1:09 PM
EGHT $15.20 Up +0.03 +0.16%
8x8 CAPS Rating: ****