What’s up with the Altium share price?

‘In response to media speculation today, Altium Limited advises that it has not received any further offer from Autodesk.’

In June, Altium (ASX: ALU) was faced with an optimistic dilemma: the Nasdaq listed Autodesk was proposing to buy the company, for $38.50 per share. That was a steep premium to where the stock traded at, at the time, and the stock, unsurprisingly surged in response.

Altium’s management however swiftly shot down that offer – at that price – saying it significantly undervalued the business. 'Altium has a unique position in the electronics ecosystem and in the past unsolicited acquisition interest has developed from partnership dialogues with others in the ecosystem,’ management said.

Then a bit later in June, Altium released a trading update to the market. Issuing a downgrade in the process, saying it expected full-year revenue and margins to now come in at the low-end of the previous guidance range. Specifically new guidance was as follows:

  • FY21 revenue of between US$190 million to US$195 million
  • FY21 margins of between 37% to 39%

Despite tempering expectations, Altium’s Chief Financial Officer remained upbeat, saying:

'Momentum has returned to Altium's business with double-digit growth in the second half, however, after a slow first half due to the impact of COVID and our pivot to the cloud, the full year is likely to be at, or slightly below, the low end of our guidance.'

Confidence in the software company is likely at an all-time low, with Altium now having issued 7 downgrades in just 18 months. As analysts from RBC put it: the company ‘still has some work to do to rebuild market confidence in the growth outlook.’

Despite that, RBC remains confident in the mid-term outlook for Altium, rating the stock Sector Perform while assigning it a $37.00 price target.

Do you have a view on Altium? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.

For example, to buy (long) or sell (short) ASX-listed stocks using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter <Company name> in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

For investors not looking to trade stocks, you can invest in shares directly through our share trading service.

The latest twist in the Autodesk offer

Mind you, the whole saga got a lot more interesting last week (and today), after reports emerged from the Australian Financial Review that Autodesk upped its takeover offer to $40.00 per share and that Altium had rejected that upped offer.

Those reports triggered a crash, with Altium falling ~10% on Monday, in response. Altium rushed its shares into a trading halt at 10:17 AM, then told the market at 11:14 AM that claims of a $40.00 per share takeover bid were categorically false. The company told the market:

'In response to media speculation today, Altium Limited advises that it has not received any further offer from Autodesk. All details relating to the Autodesk offer have been disclosed by the Company in its ASX announcement releases to the market on 7 June 2021.'

Like clockwork, the stock rose off the intraday low it recorded at 10:10 AM, trading as much as 13% off that bottom during the session.

Looking ahead, Altium is set to report its full-year results on 23 August.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.