Adobe stock sinks on $20 billion Figma acquisition

Yahoo Finance's Jared Blikre discusses how Adobe stock is moving after it announced earnings and a deal with online design tools maker Figma.

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JARED BLIKRE: All right, our trending ticker of the morning is Adobe, buying the Creative Cloud platform Figma for $20 billion in cash and stock. And that lofty purchase price sending Adobe stock down over 10%. Wow, you can see it's down 17% right now, having its worst day and plunging to the lowest price recorded since the pandemic start two years ago.

Now, Wall Street is questioning the purchase price, with Bloomberg Intelligence saying it, quote, "appears extremely expensive, given the annual recurring revenue of the largest company is only $200 million, although it may improve the overall functionality of Adobe's Creative Cloud business." Now, I want to note that $200 million in recurring revenue, that's set to double this year to 400 million, growing very quickly. So keep that in mind.

But vital knowledge-- they are raising regulatory concerns as well, noting that Adobe competes with Figma. And, quote, "it will be interesting to see how regulators approach this deal." Now, Adobe is $150 billion company, and this is another big company. So we'll have to, indeed, see how that regulatory fallout comes.