Blackboard Stock Soars; Bears Doubt a Sale
News that Blackboard has hired Barclays Capital to evaluate “strategic alternatives” after receiving an unsolicited proposal caused its stock to rise by more than 30 percent to all-time highs.
The company says it’s looking for ways to “enhance shareholder value, including whether other third parties would have an interest in acquiring the company at a price and on terms that would represent a better value for its shareholders than having the company continue to execute its business plan on a stand-alone basis.”
The news comes as short interest in Blackboard’s [BBBB 48.29 -0.51 (-1.05%) ] stock hovers at a nosebleed 44 percent — an indication that 44 percent of its shares outstanding have been sold short. Short-selling is a bearish bet against the stock.
As I wrote in February, short-sellers of Blackboard’s stock are betting that the company’s fundamentals are going the wrong way.
It’s unclear who possible buyers would be, but one large short-seller of Blackboard’s stock told me today that he would be surprised to see a deal if potential buyers do the kind of due-diligence he has done.
Blackboard makes learning management software, which is used by students and teachers on college campuses for a variety of purposes. Its market share has been rapidly falling as competitors — many using open-source software code — have eaten away at the core.
One of the most interesting new competitors, Instructure, announced last week that it had received $8 million in funding from several venture-capitalists, including Google [GOOG 525.17 0.07 (+0.01%) ] Chairman Eric Schmidt’s Tomorrow Ventures.
Much of the company’s pull comes from CEO Josh Coats, who founded computer-backup service Mozy, which he sold to EMC in 2007 for $75 million.
Instructure says that since its launch earlier this year, it has heard from thousands of schools seeking an alternative to Blackboard.