Shares of MongoDB, Inc. (NASDAQ:MDB), a cloud-database company, popped today as some in the technology industry speculated that the company would make a nice acquisition target for Microsoft.
The tech stock was up by as much as 7% today and had gained 6.5% by the end of the trading day.
While there was no company-specific news that caused MongoDB's shares to rise today, some investors may have seen an article in The Information (an online news website) which said that the company would make a logical acquisition target for Microsoft in the coming year.
Journalists at the technology publication talked with investment bankers and tech industry executives to figure out which companies could potentially be snatched up next year.
Their reasoning for Microsoft's hypothetical bid for MongoDB would be that the tech giant is in steep competition with cloud-computing rival Amazon; MongoDB would help Microsoft improve its database offerings. They also mentioned that Microsoft is already a top customer of MongoDB.
Investors appeared keen on that idea and pushed up the company's share price today, bringing the MongoDB's year-to-date gains to 158%.
It's worth reiterating that this is just speculation, and neither MongoDB nor Microsoft has announced any type of acquisition. But with Salesforce's recent $27.7 billion bid to buy Slack and NVIDIA's $40 billion bid to buy Arm Holdings, the tech industry has shown that acquisitions are on many companies' minds. The one thing MongoDB investors should remember, though, is that buying and selling stock based on speculative information isn't a great long-term investing strategy.