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DigitalOcean Shares Plunge 9% on High Volume

DigitalOcean Stock Price

DigitalOcean (NYSE:DOCN) shares dropped 9% today.  Volume was more than double normal.

It’s been a rough season for DO.  Shares today traded for as cheap as $59/share – well off the stock’s highs above $130/share only two months ago.

The reason for the plummeting valuation is not clear.  Some possibilities:

  1. DigitalOcean was overpriced.  It may still be overpriced.  The company is losing 28 cents a share on a 6.3B market cap.
  2. Investors generally loathe the “take on debt to buy back stock” approach to financial engineering.  It’s generally a cash out option that rewards owners at the expense of the long-term health of the company.  DigitalOcean announced this move recently.
  3. Motley Fool speculates it’s a reaction to announced Amazon and Microsoft moves in the cloud space.

1 Comment

  1. Susan:

    Their network is constantly attacking my VPS’es and dedicated server. They could care less, forget reporting the IP to them.

    Few years back I tried to redeem a coupon. It was like the 5th degree to get it through.

    Good for quick dev deployment, but about all I would use them for.

    Shame me for telling the truth, sometimes the truth hurts :)

    January 15, 2022 @ 3:11 am | Reply

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