- DigitalOcean is a relatively small cloud infrastructure service provider which caters to the needs of small to mid-sized businesses and individual developers.
- DigitalOcean's business model is primarily based on revenue growth while, at the same time, also aiming to increase the average spend per subscriber.
- The above 50% downside from the beginning of this year and relatively lower market cap position DOCN as an attractive acquisition target, with potential acquirers likely to benefit from revenue and cost synergies.
- In case it is acquired, DOCN could fetch more than a 30% premium over the current share price.
- In the meantime, with high market volatility and macroeconomic conditions getting worse, but with a resilient business model, I have a hold position DigitalOcean.
For further details see:
DigitalOcean: Small, Resilient, And A Potential Acquisition Target