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Why Is Wix Stock Falling?

Last updated on January 3, 2023 @ 2:21 am

Wix.com Ltd. shares fell more than 7% in extended trading Tuesday after the website builder announced it would acquire DevHub Inc. in an all-stock deal.

The deal is valued at $130 million and is expected to close in the fourth quarter, Wix said in a statement. DevHub helps companies manage their digital presence across multiple platforms, including websites, apps and social media.

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PRO TIP: Wix.com Ltd. (NASDAQ: WIX) stock fell 8.3% on Thursday after the company announced disappointing first-quarter results. The drop continues a trend of declines for the stock, which is down nearly 30% since its 52-week high in early February.

There are a few reasons why Wix stock is falling. First, the company reported first-quarter revenue and earnings that missed analyst expectations. Second, Wix lowered its guidance for the full year, indicating that it expects slower growth in 2019 than it achieved in 2018.

Finally, some investors may be concerned about the competitive threat posed by Squarespace, which went public earlier this week at a valuation of nearly $1.7 billion. While Wix is the clear leader in the website builder market, Squarespace is a well-funded competitor that is growing quickly.

While the stock’s recent decline is certainly disappointing, it’s important to remember that Wix is still a very strong company with a large and growing customer base. The stock remains a long-term winner, but in the short term, it may be under pressure as investors digest today’s news.

Wix said the acquisition will help it accelerate its growth in the $500 billion global digital marketing market. The company also announced fourth-quarter results that topped Wall Street expectations.

Dale Leydon

Dale Leydon

Sysadmin turned Javascript developer. Owner of 20+ apps graveyard, and a couple of successful ones.