What Happened?
Shares of digital infrastructure investor DigitalBridge Group (NYSE:DBRG) jumped 2.1% in the morning session on continued positive momentum following a massive rally in the previous session driven by reports of a potential acquisition.
The prior surge, which sent the stock up by more than 40%, came after news agencies reported that SoftBank Group was in discussions to acquire DigitalBridge. The company managed a large portfolio of digital infrastructure assets, including data centers and mobile towers. In response to the acquisition news, RBC Capital maintained its 'Outperform' rating and raised its price target on the stock to $23 from $19. Despite the positive catalyst, the subsequent decline suggested a technical correction as some investors cashed in on the significant recent gains.
After the initial pop the shares cooled down to $15.48, up 3.2% from previous close.
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What Is The Market Telling Us
DigitalBridge’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 20 hours ago when the stock gained 3.3% on the news that the stock's positive momentum continued as reports surfaced that SoftBank Group was in discussions to acquire the company, prompting an analyst price target increase. The stock's movement extended a significant 45% rally from the previous trading session, which was also driven by the acquisition news. Following the initial reports, RBC Capital raised its price target on DigitalBridge to $23 from $19 while keeping an Outperform rating on the stock. According to reports, the Japanese investment group was considering acquiring the digital infrastructure asset manager and taking it private. DigitalBridge manages investments in data centers, mobile towers, and fiber networks, an area of interest for SoftBank as it seeks to expand its AI-linked portfolio.
DigitalBridge is up 39.6% since the beginning of the year, and at $15.48 per share, has set a new 52-week high. Investors who bought $1,000 worth of DigitalBridge’s shares 5 years ago would now be looking at an investment worth $788.09.
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