Could ON24 Be Next?

Come, let’s engage in a little blue sky speculation. This is going to be one of my infrequent posts talking about financial considerations, so disclaimers are important:

I have ZERO insider information or informants providing any facts or rumors that would contribute to anything mentioned here. This is just my own personal musings.

I have no financial stake or investments in ON24, their competitors, or any companies mentioned in this post.

Nobody, and I mean NOBODY, should make any investment decisions based on anything I write. I’m not a financial analyst and I probably have no idea what I’m talking about.

With all that out of the way, I found myself thinking about ON24 today and wondering if they aren’t an awfully attractive takeover candidate at the moment.

The company went public on February 3, 2021. The IPO was officially priced at $50/share and the stock opened for trading at $77/share. They sold around 8.6 million shares to the public and had a first-day market capitalization of more than $3.42 billion.

Thirteen months later, the stock price closed on Thursday under $14, up from a low of $11.20. The current market capitalization is around $655.5 million. The company is facing a class action lawsuit claiming that the IPO Offering Documents were false and misleading.

Would this be a good time for a larger entity to scoop up ON24 at a bargain price? I can think of several companies that could conceivably see it as a canny move.

ON24 is not interested in the peer-level web meeting space. They aren’t going to compete with low priced Zoom, Webex, and Microsoft Teams meeting offerings. ON24 is a big-ticket offering designed for large enterprises to offer large audience webinars and webcasts. The company has made a definite push over the last year to play up a larger “digital experiences” story combining the delivery of web events with marketing, customer relationship management, lead tracking and development, and digital resource management.

So who might want to acquire that sort of technology stack?

I doubt that Microsoft would want to muddy the waters and try to integrate ON24 with its own Teams play. They tried buying a webinar offering years ago and it didn’t go well for them (buying Placeware and renaming it to Microsoft Office Live Meeting).

I discount most of the other existing players already in the webinar/webcast space. If they have enough capital to make the purchase, they don’t need the technology. They’d be buying ON24 purely for the customer list. And those customers would eventually end up angry at being forced to switch their product licensing. PGi is maybe the only vendor that might consider it. They were on an acquisitions kick before the pandemic, and their own GlobalMeet Webcast platform seems to me like it never developed the public recognition and awareness enjoyed by ON24.

But my top candidates are Salesforce and HubSpot. Salesforce has been talking about plays to boost its performance, with co-CEO Marc Benioff telling Jim Cramer recently that “there’s no finish line when it comes to making acquisitions.” They already bought Slack for peer-to-peer collaboration and might want to add a large presentation offering to keep enterprise customers tied into an end-to-end Salesforce technology stack. Salesforce has a market cap of more than $208 billion and wouldn’t even blink at the purchase price for ON24.

HubSpot has a smaller market cap, at $22.2 billion, but their stock price is very high and they have made lots of integration plays with webinar/webcast vendors. They might want to more closely tie enterprise customers into an end-to-end play with promotion, delivery, tracking, and follow-up of digital event attendees all taking place within their own technology stack.

Who knows? Maybe this is all just intellectual game-playing for my own amusement. But I have to say that the possibilities are tantalizing, and if I heard about ON24 being acquired this year I certainly wouldn’t feel surprised.

Are there any other big players you would think of as potential contenders for scooping up ON24? Let me know in the comments.