Avid Technology (NASDAQ:AVID) Inc shares jumped 20% to $24.50 on Wednesday following a Reuters report that the video and audio editing software maker has hired Goldman Sachs (NYSE:GS) to explore a potential company sale.
According to Reuters, the Burlington, Massachusetts-based company has asked for binding offers from interested parties.
Avid products that have been used in the production of blockbuster movies such as ‘Top Gun: Maverick’ and ‘Avatar: The Way of Water’ include Media Composer, MediaCentral and AirSpeed.
Earlier this month, the company reported that its first-quarter 2023 subscription revenue rose 20% year over year to $39.4 million, driven by a net increase of 20,700 Active Paid Software Subscriptions during the period.
Avid’s total revenue, though, fell 2.8% year over year, missing the analyst consensus estimate.
Avid Technology (NASDAQ:AVID) CEO Jeffrey Rosica explained to analysts on the company’s earnings call that supply chain issues created “substantial and unexpected gross margin headwinds for audio hardware,” which eroded profitability.
The company ended the quarter with $20.86 million in cash and cash equivalents as of March 31, 2023, down from $35.25 million at the end of December.
Shares of Avid Technology (NASDAQ:AVID) have slipped 9% year to date.
Contact Sean at sean@proactiveinvestors.com