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Why Infoblox Inc. Stock Is Surging Today

By Timothy Green - May 12, 2016 at 10:24AM

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A potential buyout offer from a private equity firm has pushed shares higher.

Image source: Infoblox.

What: Shares of cybersecurity company Infoblox (NYSE: BLOX) soared on Thursday after Bloomberg reported that the company has received an offer to take it private. At 10:45 a.m. ET, the stock was up about 22%.

So what: According to Bloomberg, private equity firm Thoma Bravo proposed last week to take Infoblox private. Terms of the potential deal were not disclosed, and Infoblox has not released any statement on the matter. In April, Starboard Value disclosed that it had separately built up a 7.1% stake in the company.

BLOX Chart

BLOX data by YCharts.

Shares of Infoblox currently trade well below the 52-week high, even including the surge on Thursday. At the current stock price, the company is valued at about $1.1 billion. In February, Infoblox stock plunged after the company provided revenue and earnings guidance that was below analyst estimates.

Now what: As always, buying a stock solely due to acquisition rumors is rarely a good idea. There's no guarantee that a deal will take place, and if it does, it may take weeks or months before anything is announced. Thoma Bravo is a technology-focused private equity firm, with a long list of software companies in its portfolio, so Infoblox would seem to be a good fit. But only time will tell whether this rumor ultimately becomes reality.

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