Adobe Stock Prices (ADBE) Plummet Due to Figma Deal and DoJ

Adobe Inc. is a tech-based company that operates in the provision of digital marketing and media solutions. In a deal dated September 15, 2022, Adobe announced to acquire Figma, a design platform for $20 billion. The deal was counted as the largest acquisition till date in the name of Adobe. According to Adobe officials, the new acquisition will expand the company’s product portfolio with Figma’s web-based, multiplayer capabilities on board, and enhance the delivery of Adobe’s creative cloud techs on the web.

The acquisition deal witnessed many raised brows as the figures did not seem to add up. In a report Adobe valued Figma around $400 million, and when looking at the deal, it felt significantly overvalued to the Wall Street analysts. Many felt the company was paying about 50 times revenue in the Figma acquisition.

Many also speculate the deal was made to Figma, with an aim to allegedly eradicate the competition in the industry. Although Adobe denied the accusations, when confronted in the past regarding the deal to be meant to create a monopoly.

In light of the occurrence, the US Department of Justice (DoJ) reported about its plan to file an antitrust lawsuit seeking to block Adobe’s proposal to acquire Figma for $20 billion. Many big brands have already encountered antitrust lawsuits by the DoJ. Google was sued by the DoJ over allegedly trying to establish an advertising monopoly.

The lawsuit is anticipated to be filed as early as next week and can cause turbulence in the Adobe stock price. Separately, earlier this week, Adobe entered into a deal with Qualcomm (QCOM) for the communication chipmaker to use Adobe’s marketing software.

Adobe Stock Prices (ADBE) have broken the regression channel to rise, but faced rejection near $400.05. The prices started to fall after the report rolled out by DoJ. The share prices shed 7.63% in the intraday session and about 10.80% in the past 7 days. The volume recorded a selling pressure among the investors and a sudden flush of negative sentiments. The ADBE prices are currently testing the support near $319.00, and the support proves to be weak, the Adobe stock prices can fall to the secondary support of $275.20.

The RSI has dived to the floor range of 30 and may anytime soon enter the oversold zone mirroring the selling pressure prevailing in the market. The MACD records ascending seller bars in the zone below the zero-histogram mark, while the lines mark a negative cross-over. The overall analysis indicates bearish signals for Adobe stock prices.

Conclusion

The Adobe stock prices are facing the disguised wrath from the investors. The falling prices are encouraging them to opt for sell-off and the lawsuit amplifies the effect of the bearish influence. The holder may look out for the support test near $319.00.

Technical levels

Support levels: $319.00 and $275.20

Resistance levels: $400.05 and $442.00

Disclaimer

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