Figma Acquisition Impacted the Share Price of Adobe (ADBE)

Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned ‐5.17% net of fees and expenses, outperforming the Russell 1000 Value Index, which returned ‐5.62%. At the same time, the fund underperformed the S&P 500 Index, which returned ‐4.88%. The fund’s outperformance to the Russell 1000 Value Index in the quarter was attributed to stock selection. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Aristotle Capital highlighted stocks like Adobe Inc. (NASDAQ:ADBE) in its Q3 2022 investor letter. Headquartered in South San Jose, California, Adobe Inc. (NASDAQ:ADBE) is a global software company. On November 23, 2022, Adobe Inc. (NASDAQ:ADBE) stock closed at $335.78 per share. One-month return of Adobe Inc. (NASDAQ:ADBE) was 4.77%, and its shares lost 49.76% of their value over the last 52 weeks. Adobe Inc. (NASDAQ:ADBE) has a market capitalization of $156.104 billion.

Aristotle Capital made the following comment about Adobe Inc. (NASDAQ:ADBE) in its Q3 2022 investor letter:

Adobe Inc. (NASDAQ:ADBE), the content creation and publishing software provider, was the largest detractor for the quarter. So far in 2022, Adobe has achieved record revenues with strength in all its businesses, as the acceleration toward digital has continued to drive content creation across industries. During the quarter, however, the company’s shares declined after announcing its plans to acquire Figma, a web‐first collaborative interface design platform, for $20 billion. What at first glance may seem like a steep price, Figma’s web‐based, multi‐player platform could accelerate the delivery of Adobe’s Creative Cloud technologies on the web, increasing Adobe’s reach and total addressable market. Management expects the deal to close in 2023 and the transaction to be accretive by the end of the third year of integration. As is the case with any significant acquisition, we will take our time to understand this deal’s rationale and follow management’s ability to take Figma to “new heights.” This has been the case with previous acquisitions, including Marketo and Magento (although each at a much smaller purchase price). In general, we admire management teams that are able to recognize the evolving needs of their clients and are unafraid of “competing with themselves” by developing new offerings. We will continue to study this acquisition and better understand the desire of content creators to collaborate over the web.”

Adobe, software

Adobe Inc. (NASDAQ:ADBE) is in 22nd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 93 hedge fund portfolios held Adobe Inc. (NASDAQ:ADBE) at the end of the third quarter, which was 92 in the previous quarter.

We discussed Adobe Inc. (NASDAQ:ADBE) in another article and shared the biggest tech companies in the world after the 2022 stock market collapse. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.

 

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Disclosure: None. This article is originally published at Insider Monkey.

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