Splunk surges 14% after the software company announces a $1 billion investment from Silver Lake
Splunkstock leaped 14% after the company announced a $1 billion investment from Silver Lake.
- The cash infusion will be plowed back into the business and used to fund a $1 billion share buyback.
- Splunk has been undergoing a long-term pivot from software license sales to recurring revenue cloud services.
Shares of analytics company Splunk leaped as much as 14% Tuesday after the company announced a $1 billion investment from Silver Lake, a tech-focused
The cash infusion, funded through convertible debt that can be swapped for equity, will be plowed back into the business and used to fund a $1 billion share buyback program, Splunk said in a statement. Under the deal, Silver Lake chairman and managing partner Kenneth Hao will join Splunk's board.
"It has become increasingly clear that a cloud-driven transformation is critical to modernization and Splunk is ideally positioned to help organizations throughout the world manage the complexity associated with this transition," said Hao.
Splunk has been undergoing a long-term pivot from software license sales to recurring revenue cloud services, entering a market as competitive as it is profitable. In the first quarter of 2021, 39% of Splunk's revenue came from the cloud, versus 26% in Q1 last year.
The company has never turned a profit, and is banking on fast growth to attract capital and offset its losses. The $1 billion investment from Silver Lake is a vote of confidence in Splunk's ability to manage its growth.
Splunk's shares peaked at $143 during the trading day. The stock was trading at $137 per share, up 9.17% as of 1:40 p.m. ET.
- Elizabeth Holmes ordered dinners for Theranos staff but made sure they weren't delivered until after 8 p.m. so they worked late: book
- My twin and I were in separate classrooms in school. Our joint math lesson made me realize how silly that was.
- 2,000 years before 'manscaping' and smooth armpits, the Romans were seriously into hair removal, archaeological findings show
- Best flagship phones in India in 2023
- Small Size Bluetooth speakers in India
- IIT Madras tops Indian institute ranking fifth year in a row – here are the top 10
- Best tablets under ₹5000 in India
- Speedy, small loan market sees Muthoot Microfin make an entry