Zendesk Stock Bounces Off Lows Amid Settlement Talks

Zendesk is in settlement talks with activist investor Jana Partners

Deputy Editor
Jun 15, 2022 at 10:53 AM
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Zendesk Inc (NYSE:ZEN) is up 2.6% to trade at $58.47 at last glance, after news that the equity is in settlement talks with activist investor Jana Partners. The agreement could bring several changes, including the removal of CEO Mikkel Svane and former Autodesk (ADSK) CEO Carl Bass. Jana also argued that the company needs rehabilitation after its attempt to buy Momentive Global. 

Bouncing off yesterday's two-year low of $57, ZEN is still down 27.1% in just the last week. Today's positive price action could have already been in the cards, however, as the stock's Relative Strength Index (RSI) of 23.3 sits firmly in "oversold" territory. 

The equity is surrounded by pessimism from analysts and options traders alike, meaning an optimistic shift could keep it moving off its lows. Of the nine analysts in coverage, five carry a tepid "hold" rating.

Meanwhile, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.47 puts have been bought for every call in the last two weeks. This ratio sits in the 98th percentile of ZEN's annual range, indicating puts have rarely been more popular in the past year.

It's also worth noting that short interest represents 6.4% of the stock's available float. In other words, it would take over three days to buy back these bearish bets, at ZEN's average pace of trading. 

 

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