Why Axon Enterprises Stock Just Popped 8%
Another competitor bites the dust.
What happened
Shares of Axon Enterprises (NASDAQ:AAXN) stock -- the company formerly known as Taser until it decided its real future lies with selling Axon body cameras for police -- jumped as high as 10% in early trading Friday and were up a good 8% as of 3:30 p.m. EDT.
The reason? This morning, Axon announced it's agreed to buy its longtime rival Vievu.
If you can't beat 'em, eat 'em. Image source: Getty Images.
So what
As explained in the press release, Axon is buying Vievu from its parent company, Safariland, for an undisclosed sum and merging that company's body-camera business into its own. Safariland, in turn, will become Axon's "preferred holster provider for Axon's TASER" stun guns for at least the next 10 years.
This is a big deal for Axon, which at one point was able to say that Vievu was the only company that had successfully beat it out for a contract to supply police departments with body cameras. Eliminating that competition by buying it out is obviously a positive for Axon's business -- assuming the buyout didn't come at too high a price.
Related Articles
Now what
With Vievu out of the picture, Axon's toughest competition in the body-camera space probably comes from longtime rival Digital Ally, a tiny company with barely 4% of Axon's annual sales and less than 1% of Axon's market cap. Although legal disputes are ongoing between the two companies, if Digital Ally is the biggest threat Axon has to worry about going forward, I suspect Axon investors have little to worry about.
Today's rally is justified.