Shares of 8x8, Inc. (EGHT -2.37%) were falling today after the company announced that it has entered into an agreement to acquire Fuze, a cloud-based enterprise communications company. The tech stock was down by 10.6% as of 3:20 p.m. ET.
8x8 said that the purchase of Fuze will cost approximately $250 million in stock and cash. The acquisition is expected to close during the fiscal fourth quarter.
The company said that purchasing Fuze will accelerate 8x8's eXperience Communications as a Service (XCaaS) offering and add to the company's enterprise customer base.
"The acquisition of Fuze expands our operational scale and extends our global presence as we meet enterprise demand," said 8x8 CEO Dave Sipes in a press release. The company said that it expects to remain non-GAAP profitable after the transaction closes and that up to $130.2 million will be used "to retire Fuze's debt and pay for the equity owned by non-accredited stockholders of Fuze."
Acquisitions are a very normal part of many publicly traded companies, but investors can sometimes get concerned about how much a company is spending or doubt that the purchase will pay off in the long run.
Today's drop adds to the downward trajectory 8x8's stock has taken in 2021. Year to date, the company's share price has fallen 44.1%.
Investors may want to tread lightly before investing in 8x8 right now as it appears that the company's stock is fairly volatile.