- Yesterday, Splunk (NASDAQ:SPLK) announced a $1B investment from Silver Lake that will fund growth initiatives and manage its capital structure, including an up to $1B share buyback.
- BofA (Buy rating, $180 price target) says the investment brings "seasoned, outside advisory to bolster transition execution," likely defends Splunk against an activist investor, and provides the company with a valuable source of M&A insight.
- Bernstein says the investment is a "vote of confidence in Splunk," and the addition of Silver Lake managing partner Kenneth Hao to the board could help steer the company through its business model transition. The firm notes that some investors could see this as a sign that Splunk could be taken private like the recent Cloudera deal.
- Splunk shares are currently pulling back 2.1% after yesterday's rally.
- Background: Splunk stock pops on Silver Lake's $1B investment, share buyback