Investors reacted positively to software company Synchronoss Technologies’ (SNCR) $100 million stock offering on June 25. It plans to use the offering’s proceeds primarily to redeem preferred stock and pay down its revolving credit facility. However, because SNCR is facing intense competition from top players in the software space, the question is, is it wise to bet on the stock now? Let’s find out. Global software and services company Synchronoss Technologies, Inc.’s (NASDAQ:SNCR) solutions are used by more than 200 businesses worldwide, including by the likes of Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (T). Its shares traded higher on June 25 following its pricing of a $100 million public offering of common stock. The company plans to use the offering’s proceeds to redeem its Series A convertible participating perpetual preferred stock and to pay down its revolving credit facility. Its stock price has soared 46.5% since hitting its 52-week low of $2.35 on June 21, 2021.
However, SNCR has lost 24.9% so far this year and 9.5% over the past three months to close Friday’s trading session at $3.53. This can be attributed primarily to its weak financials in the first quarter (ended March 31, 2021) and poor profitability. The company also continues to face intense competition from top players in the software space, such as SAP SE (DE:SAPG) (SAP) and Oracle Corporation (NYSE:ORCL).
Furthermore, SNCR is currently searching for a new CFO because its current CFO, David Clark, is expected to step down from his role on August 9, 2021. So, SNCR’s near-term prospects look uncertain.