8x8 Shares Fall As Board's Buyer Search Fails

8x8, Inc. (NASDAQ: EGHT) shares fell on Wednesday after a source close to the situation told Benzinga its board initiated the process to find suitors, but the sale proposal failed to inspire any buyers.

The stock initially spiked on news of buyout talk, however, due to uncertainty surrounding the outcome of the search, investors might have been cautious on 8x8 — a company that markets cloud-based, enterprise-class software solutions.

Summit Redstone analyst Jonathan Kees, who has a Buy rating on the stock, said a wide range of companies might consider an 8x8 bid:

• Those with a gap in their SMB segment;
• Those needing a contact or call center;
• A large corporation such as AT&T Inc. (NYSE: T) or Verizon Communications Inc. (NYSE: VZ).

Kees offered the latter category with a caveat.

"Big nationwide or international players — like a Domino's — could afford to use AT&T or Verizon services for something like a contact/call center, but a 'mom and pop shop' would never be able to foot the cost of contracting AT&T or Verizon for that kind of service," he said. "That being said, if AT&T or Verizon decided (that) targeting the small player market could provide strategic opportunity, they might consider buying a smaller player like 8x8."

The analyst also listed Mitel Networks Corp (NASDAQ: MITL) and a privately-owned company like Genesys Telecommunications Laboratories, Inc., as appropriate suitors. With Genesys, however, he highlighted that company "has been busy" as they recently made a big purchase of Interactive Intelligence Group Inc (NASDAQ: ININ)

Prior to the news, shares had risen 800 percent since 2010 and 30 percent in 2016, but stalled during the back half of the year. The neared the close at $14.35, down 2.7 percent.