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8x8 (EGHT) stock price drops on plan to acquire Fuze

By Monte Stewart


8x8 headquarters
Cloud-computing company 8x8 announced its intention Wednesday to acquire Fuze - Photo: Shutterstock

US cloud-company 8x8's share price closed down 12.06% Wednesday after the company announced its intention to acquire Fuze.

Campbell, California-based 8x8's stock price closed at $18.95, a drop of $2.06 from a day earlier.

Fuze is a private cloud-computing company based in Boston, Massachuessetts. 8x8 announced in a news release that it plans to purchase the company for $250m in cash and shares.

Analyst views deal positively

Despite the stock-price plunge: Needham & Company analyst Ryan Koontz said: “We view the transaction positively as EGHT gains a strong customer base to cross-sell (its contact centre as a service) and offers needed scale, systems, and (sales and marketing) investment that Fuze lacked.”


38,807.60 Price
-0.110% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


2,072.25 Price
+1.760% 1D Chg, %
Long position overnight fee -0.0193%
Short position overnight fee 0.0111%
Overnight fee time 22:00 (UTC)
Spread 0.30


0.62 Price
+0.220% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168

Oil - Crude

74.50 Price
-1.560% 1D Chg, %
Long position overnight fee -0.0136%
Short position overnight fee -0.0083%
Overnight fee time 22:00 (UTC)
Spread 0.040

With Fuze, Koontz said, 8x8 acquires an attractive customer base of more than 400,000, a strong engineering team, and an incremental geographic footprint that will accelerate its experience-centre-as-a-service-strategy. 8x8 will also be able to maintain its profitability in relation to Fuze after the deal closes, he added.

Koontz said the stock-price decline is likely due to Fuze being characterised as a lower-growth and lower-margin business than 8x8. He reiterated his buy rating and $32 price target for Fuze.

Read More: Riot Blockchain (RIOT) acquires power distributor for $50m

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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