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Here’s Why Qlik Is Climbing

Published 03/28/2016, 10:41 AM
Updated 05/14/2017, 06:45 AM

Qlik Technologies (NASDAQ:QLIK)is having an incredibly strong day in the market today, which is much needed following recent declines on the stock. The gains on the stock are coming as the result of a potential acquisition as investors continue to put pressure on the company. Today, we'll talk about the possibility of an acquisition, how investors are reacting to the news, and what we can expect to see from QLIK moving forward. So, let's get right to it.

QLIK Is Rumored To Be Waiting To Be Acquired

As mentioned above, the big reason for the gains we're seeing in the stock today is the idea of an acquisition. The company has struggled for quite some time now with weak operating cash flow and other issues, bringing the value of the stock down and making this a prime time for an acquisition. On Monday, it was announced that the QLIK is in the process of exploring strategic alternatives, one of which being the sale of the company. This exploration is coming after pressure by an activist shareholder.

Last month, investors cheered as Elliott Management Corp. announced that it had purchased an 8.8% stake in QLIK. The reason they cheered was that the corporation would likely put pressure on the stock, leading to strong growth, and that's exactly what's happening right now. In fact, Elliott Management Corp announced that QLIK should be taken over by a larger technology rival.

Is An Acquisition Actually Going To Happen?

This, my friends, is the million dollar question. The reality is that Qlik Technologies hasn't announced its plans quite yet. While it has said that it is exploring strategic alternatives, it has not yet confirmed that it has decided to move forward with any acquisition at the moment. Until this is announced, nothing is set in stone.

How The Market Reacted To The News

As investors, we know that the news moves the market. Any time there is positive news released with regard to a publicly traded company, we can expect to see losses in the value of the stock associated with the company. Adversely, any time we see negative news released, gains are likely on their way. It's also worth while to mention that there are few pieces of news that get investors quite as excited as the prospect of an acquisition. So, it only makes sense that we're seeing solid gains in the value of the stock today. Currently (10:17), QLIK is trading at $28.91 per share after a gain of $2.22 per share or 8.32% thus far today.

What We Can Expect To See Moving Forward

QLIK has struggled quite a bit as of late, and for good reason. The company simply can't seem to get a plan together for growth and follow that plan. So, it does make sense that an acquisition is on the way. Nonetheless, investors shouldn't hang onto this idea at the moment. The truth is that with nothing verified, we have no idea if an acquisition is even going to happen; and if it's announced that there's no acquisition plans, the stock is going to tank. Then again, if an acquisition is announced, it will climb. As such, investing in QLIK at the moment would be like investing in a coin flip.

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