What Happened?
Shares of stock photography and footage provider Shutterstock (NYSE: SSTK) fell 9.4% in the afternoon session after its proposed merger with Getty Images was referred for a more in-depth, Phase 2 review by the UK's Competition and Markets Authority (CMA). This deeper investigation was launched despite Getty Images offering remedies to avoid it. The CMA expressed concerns that combining two of the largest stock imagery providers could result in higher prices and lower quality services for customers. While Shutterstock voiced its disappointment with the decision, the company affirmed it remained committed to the merger. The referral created uncertainty about the deal's future, raising the possibility of significant delays or even it being blocked, which concerned investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Shutterstock? Access our full analysis report here.
What Is The Market Telling Us
Shutterstock’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 3% on the news that investors' concerns about US-China trade tensions were eased by President Trump's more conciliatory tone over the weekend. Following a sharp market drop the previous trading day driven by trade conflict escalation, Wall Street's main indexes opened significantly higher. The Dow Jones Industrial Average, S&P 500, and Nasdaq all saw gains of over 1%. The rebound was attributed to comments made by the President on social media, where he stated the "China situation will all be fine" and that the U.S. "wants to help China, not hurt it!!!" This shift in rhetoric prompted a return to risk assets, as traders brushed aside the previous week's fears. The rally ahead of the upcoming earnings season suggests that the "buy-the-dip" mentality remains strong among investors whenever trade jitters subside.
Shutterstock is down 21.9% since the beginning of the year, and at $22.79 per share, it is trading 34.1% below its 52-week high of $34.57 from November 2024. Investors who bought $1,000 worth of Shutterstock’s shares 5 years ago would now be looking at an investment worth $344.83.
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