Software maker GitLab is exploring a sale. Rival Datadog is among possible suitors, according to a report. GitLab stock has retreated about 19% in 2024.
On the stock market today, GitLab stock popped 6.9% to 54.15 in afternoon trading. Datadog stock fell 7.9% to 120.44.
Google parent Alphabet is among GitLab's investors. Reports also link Google to possible acquisitions of HubSpot and more recently cybersecurity firm Wiz.
Datadog could not be reached for comment on its interest in GitLab, Reuters reported.
GitLab Stock: Crowded Software Market
Further, Alphabet has a 22.2% voting stake in GitLab through its venture capital arm, Reuters said. At William Blair, analyst Jason Ader calls Alphabet a possible buyer along with IBM.
Founded in 2014, GitLab helps customers develop software and deploy new applications in a secure process. San Francisco-based GitLab operates in a crowded software development market called "DevOps." DevOps stands for developer and operations.
"Beyond the consolidation trend in the DevSecOps industry, we believe the uncertain health of GitLab CEO and co-founder Sid Sijbrandij (who controls 45.5% of GitLab voting stock through dual-class shares) could be a factor in the board's openness to a potential sale," said Ader.
Aside from Datadog, GitLab stock competes with Microsoft, Atlassian and JFrog. The company also competes with privately-held Cloudbees.
"We think an acquisition by Datadog would be interesting as they continue to broaden its platform into security and across the software development lifecycle," said RBC Capital analyst Matthew Hedberg in a report. "That said GitLab is a mix of SaaS (subscription) and on-prem software as we believe integration efforts would be substantial given Datadog leverages a single cloud platform."
In addition, GitLab stock has a Relative Strength Rating of only 19 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
