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 software-as-a-service cloud-computing company Eloqua (UNKNOWN:ELOQ.DL) soared as much as 33% after it agreed to be acquired by Oracle (NYSE:ORCL) for $811 million, or $23.50 per share.
So what: According to Oracle, today's purchase of Eloqua will allow it to expand its cloud-computing capabilities and move into an area of growth that's rapidly expanding: the automation of administrative tasks. Eloqua recently released a new series of SaaS products over the summer, and shares have doubled since they debuted on the Nasdaq just five months ago.
Now what: It will be a few quarters before we find out if this deal is a positive for Oracle, but Eloqua shareholders have to be jumping up and down with excitement considering their company wasn't expected to turn an annual profit until at least 2014. To put this in another light, Oracle paid about 6,750 times 12-month trailing EBITDA for a company that merely rolled out a few new cloud-computing products. I congratulate Eloqua shareholders, but I don't see any immediate benefit to Oracle from today's deal.
Craving more input? Start by adding Eloqua to your free and personalized Watchlist so you can keep up on the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool owns shares of Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.