SurveyMonkey just got rejected

SurveyMonkey just got rejected

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And the survey says? A resounding no. Zendesk (ZEN) investors have voted down the company's decision to purchase Momentive Global (MNTV), the parent company of SurveyMonkey. The deal, which was valued at roughly $4b, had been roundly criticized by prominent investors including state pension funds and large mutual funds, who questioned its rationale and said it would likely be too risky.

A deal was struck last October, however, since then, it has struggled to drum up the requisite support amongst investors. Jana Partners LLC, an activist investment firm, argued that the deal would result in the slowdown of Zendesks growth as well as impact its profit margins. 

“While we were excited by the potential of this transaction to transform the customer experience and create stockholder value, we respect and appreciate the perspectives of our stockholders,” Zendesk Chief Executive Mikkel Svane said in a statement. While Zendesk was keen to grow past the company's core business, the latest rejection from shareholders could see it opt for a build first strategy rather than some retail therapy. As your parents say, there's always food at home!

Why it matters

The SaaS arena is ruthless. Digital products are always looking to level up, and with the big beasts, it usually comes in the form of acquisitions. Just recently, SoFi (SOFI) went on a shopping spree to bolster its digital banking ranks. 

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