Zendesk shares plunge on companys agreement to buy Momentive for about $4 billion in stock
Summary
Zendesk shares plummeted as much as 23% on Friday after the developer of customer-service software agreed to spend almost one-third of its market cap on the purchase of Momentive Global, formerly known as SurveyMonkey. Analysts slashed their ratings and price targets on Zendesk because of the hefty dilution and the risk of spending so much on a business thats growing more slowly than the acquirer. Rivals include Salesforce and ServiceNow at the high end and Freshworks, Kustomer, Zoho and Monday.com in the mid-market and with some of its other services. By acquiring Momentive, Zendesk instantly picks up a business with over $100 million in quarterly revenue thats best known for its survey software. The company rebranded from SurveyMonkey to Momentive in June, to signify its expansion into other areas, like providing market and brand analysis to customers.
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