What Happened?
Shares of digital advertising technology company PubMatic (NASDAQ:PUBM) jumped 6.3% in the afternoon session after Craig-Hallum initiated coverage of the stock with a Buy rating. Craig-Hallum analyst Jason Kreyer started covering PubMatic with the Buy rating per StreetInsider.
An initiation is a brokerage firm's first formal rating on a stock. A Buy rating signals that the analyst expects the shares to perform well, and new coverage from a brokerage can draw more investor attention to a company. No other company-specific news appeared to explain the gain.
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What Is The Market Telling Us
PubMatic’s shares are very volatile and have had 22 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 7 days ago when the stock gained 2.6% on the news that a federal court ordered behavioral remedies against Google, prohibiting the company from favoring its own ad tools over rival ad tech platforms. The U.S. Department of Justice announced that the court order requires Google to prohibit AdWords from preferentially bidding into its own ad tools or directly into DFP.
Under the memorandum and opinion unsealed by U.S. District Judge Leonie Brinkema, Google must also integrate its ad exchange with rival publisher ad servers and allow publishers to export data from DFP and AdX to facilitate switching providers. Furthermore, the behavioral rules prevent Google's ad-buying business from manipulating auctions, obligate the company to share data with competitors, and mandate that Google submit to a compliance monitor and a technical committee for six years.
PubMatic is up 116% since the beginning of the year, and at $18.56 per share, it has set a new 52-week high. Despite the year-to-date gain, investors who bought $1,000 worth of PubMatic’s shares 5 years ago would now be looking at only $658.16.
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