Splunk Shares Spike Following Cisco Takeover Report
Chuck Robbins, CEO, Cisco Systems, speaking at the World Economic Forum, Davos, Switzerland, January 21, 2020.
Splunk shares rose as much as 14% in extended trading on Friday after the Wall Street Journal reported that Cisco had made an offer to buy the data analytics software company for more than $20 billion.
At the height of its after-hours move, Splunk was valued at more than $20 billion, down from $18.2 billion at the close of trading.
Representatives for Cisco and Splunk declined to comment.
Splunk’s software has gained popularity as a security threat detection tool. Cisco has sought to grow its security business while also selling data center networking equipment and Webex collaboration software.
Shares of Splunk have fallen 49% since hitting a record high in September 2020. The stock fell 18% on November 15, after the company said CEO Doug Merritt, who led the company for six years, would resign immediately. The board named Chairman Graham Smith as interim CEO and launched a search for a permanent replacement.
Splunk is shifting to providing cloud services to customers and said in December that nearly 37% of revenue last quarter came from cloud usage.
Splunk’s total revenue increased 19% year-over-year, while Cisco’s overall revenue last quarter increased 8%. Cisco has long grown its business through acquisitions and in 2020 it bought network monitoring company ThousandEyes for around $1 billion.
If a deal for Splunk is reached, it would be by far the biggest ever for Cisco.
According to a follow-up report from Bloomberg, talks between the companies have broken down in recent weeks.
Read the Wall Street Journal report here.