Reports of a possible sale cause Box shares to jump

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The company’s stocks surged by almost 20% on speculation that a sale is looming.

Box shares rose on Monday, following a report that the company has discussed a potential deal with interested buyers. Indeed, Reuters reported this week that Box is talking with other companies as well as private equity firms.

Reuters’s sources requested anonymity because the matter is confidential. Box declined to comment.

Box shares jumped as much as 17% on the news to $26.47, giving the company a market value of about $4.3 billion. DA Davidson analyst Rishi Jaluria wrote in research note on Monday afternoon that Box could fetch more than $34 per share in a sale.

The company’s fortunes rose thanks to COVID-19

Founded in 2005, Box offers a range of products and platforms suited to the pandemic work environment. These include file sharing, cloud storage and cloud backup.

Demand for secure file-sharing and other workplace collaboration services has boomed since the onset of the pandemic. Companies whose employees are working from home are driving the growth.

Is the company boxed into a sale?

Last month, Reuters reported that Starboard was preparing to launch a board challenge against Box unless it took steps to boost value for shareholders.

Starboard apparently believes that the company failed to capitalize enough on the work-from-home trend during the COVID-19 pandemic.

Box shares currently trade at around $22 apiece, only marginally higher than the price at which it debuted on the New York Stock Exchange in January 2016. Earlier this month, Box reported better-than-expected fourth quarter financial results. Revenue was $198.9 million, up 8 percent year-over-year.

For the full FY 2021, revenue was $770.8 million, an increase of 11 percent from fiscal year 2020.

L:ast week, Box filed with the Securities and Exchange Commission and said it has extended the deadline for notice of Board of Director nominations to May 11.