Proofpoint Inc. (NASDAQ: PFPT) is a leading next-gen cybersecurity company that helps protect large and mid-sized organizations from advanced threats and compliance risks. On April 26, 2021, Proofpoint announced that plans are underway for its acquisition by Thoma Bravo — a top private equity investment firm — in an all-cash transaction that values the company at approximately $12.3 billion.
While this transaction will see Proofpoint become a private company, investors can still get a hold of the next frontier in cybersecurity and compliance solutions. Use our guide to learn how to buy PFPT stock today.
How to Buy Proofpoint Inc. (NASDAQ: PFPT) Stock
If you’re a budding investor, owning Proofpoint stock may provide some level of portfolio diversification across a wide range of assets. Some would say one of the biggest risks you can take on the stock market is not diversifying. We understand you might still not know how to buy stocks, but our beginners’ guide should prime you up for the dance. Follow these 4 simple steps to buy PFPT.
- Pick a brokerage.
The first step to owning Proofpoint stock is opening an account with a brokerage — a regulated financial firm that will buy and sell shares on your behalf. Most brokers in the United States will provide full access to the Nasdaq (the index on which PFPT is listed). Even so, that’s just the tip of the iceberg when picking a brokerage. Here are a few questions that will help you narrow down your broker options:
• What’s the minimum amount of money needed to start trading stocks? Is there an ongoing balance that I must maintain in my account?
• How much does the broker charge in fees? Are there commissions charged on each trade placed? Does the broker charge a monthly or annual account maintenance fee?
• What type of trading platform does the broker offer? Can I trade through a web-based platform, desktop platform or mobile app?
• Does the brokerage provide access to additional markets, for instance, options, futures and forex trading?
• How can I contact customer service when I need assistance? Is there a 24/7 dedicated customer service line? Will I pay a premium to access advanced customer support capabilities?
• What are my brokerage account funding options?
- Decide how many shares you want.
After picking a broker, it’s time to decide how many shares of PFPT stock you want to own. Typically, this decision will come down to the amount of money you’re willing to invest and the prevailing stock price. To determine the number of shares you’ll own, take the dollar amount you want to invest and divide it by the current stock price.
For instance, if PFPT is trading at $170 and you want to invest $850, you’ll own 5 whole shares ($850/170 = 5). You’re not limited to whole shares since most brokers now allow for fractional share ownership. This can be a great option if you intend to invest smaller sums periodically.
- Choose your order type.
Since stock prices fluctuate during normal trading hours, instruct your broker on how to buy your desired stock. Since there are many order types you can place through a brokerage, it’s a good idea to familiarize yourself with them using a paper trading account. Different order types provide different outcomes on your trades.
• Bid: A bid is the maximum price you’re willing to pay for a stock.
• Ask: The ask is the minimum price you’re willing to accept for a stock.
• Spread: The difference between the bid price and ask price is the spread or bid-ask spread.
• Market order: A market order is an instruction to buy a stock at the next available price. Market orders placed during normal trading hours are guaranteed to fill.
• Limit order: A limit order is an instruction to buy a stock only at a specific price. For instance, you can set a limit order to buy PFPT at or below $150 per share. While limit orders can be advantageous in a highly volatile environment, they may never fill unless the stock hits your target price.
• Stop order: Your broker executes a stop order if the price of PFPT goes above a specific price. For instance, you may set your stop order to buy PFPT stock when its price rises above $150 per share.
Depending on your investing experience, you may also access more advanced order types.
- Execute your trade.
You’re now on the home stretch. After placing an order, your broker will fill it according to the instructions provided. Funds are deducted from your account and the equivalent shares will reflect in your account. You now own some shares of PFPT stock.
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Proofpoint Stock History
Proofpoint was founded in 2002 to provide a unified solution to help enterprises address their growing data security requirements. Today, the company provides threat protection, information protection, user protection, business ecosystem protection and compliance solutions to address the ever-evolving threat and compliance landscape.
With an integrated suite of cloud-based solutions, Proofpoint is a huge cybersecurity player for more than half of the Fortune 1,000. On April 26, 2021, Proofpoint announced it had agreed to be acquired by Thoma Bravo in a $12.3 billion all-cash transaction, which will see its common stock no longer listed on any public market. Under the agreement, Proofpoint shareholders will receive $176 per share in cash.
The transaction closed on August 31, 2021 for $12.3 billion cash, or $176 per share.
Screenshot from Benzinga Pro on April 28, 2021.
Pros to Buying PFPT Stock
As the cybersecurity and compliance landscape evolves, Proofpoint proves to be a solid buy for anyone looking to have a tech diversified portfolio. Its integrated suite of on-demand security-as-a-service solutions enables large and mid-sized organizations to stay ahead of advanced security threats and compliance risks. Remember, desktop threats, modern compliance concerns and other issues plague technology companies every day. Because this is an ever-present issue, a company like PFPT is always in demand.
Its comprehensive platform provides advanced threat protection, security awareness training, threat intelligence, email authentication, data loss prevention, digital risk protection, cloud application protection and threat response capabilities.
Proofpoint places people at the center of its security and compliance strategy and plays a crucial role in helping enterprises protect their data. The company’s opportunity as a privately held firm is incredibly compelling as the company looks forward to driving continued business growth and delivering world-class advanced threat protection to even more customers.
As of December 31, 2020, Proofpoint has approximately 8,000 enterprise customers, which includes approximately 57% of the Fortune 1,000 companies and 27% of the Global 2,000 companies. Its customer base also comprises clients who generate more than $10,000 in annual recurring revenue.
Cons to Buying PFPT Stock
Proofpoint operates in a market that’s highly competitive, fragmented and subject to rapid changes in technology. It primarily competes with companies that offer a broad array of data protection and governance solutions. Proofpoint has to battle it out with players like Google, Inc., Cisco Systems, Inc., Microsoft Corporation and FireEye, Inc.
Some of Proofpoint’s competitors have greater sales, marketing and financial resources, greater name recognition and a more extensive geographical presence. The company may face future competition from other large, established companies as well as emerging companies. The company also points to the likelihood of continued consolidation in the industry, which may result in price competition.
A True Cybersecurity Powerhouse
Proofpoint has created a name for itself as a true powerhouse in the cybersecurity niche due to its innovative suite of market-leading products and an impressive customer base of top global companies. As cyber attacks become more sophisticated, Proofpoint continues to deliver effective solutions to help organizations protect their data.
Proofpoint’s acquisition by Thoma Bravo will see it become a private company with the flexibility and resources to continue delivering effective cybersecurity and compliance solutions to protect people and organizations globally. The company will also benefit from the operating capabilities, deep sector expertise and capital support of Thoma Bravo.
Frequently Asked Questions
Does Proofpoint pay a dividend?
Proofpoint has never declared or paid dividends on its common stock.
Does Proofpoint have a direct stock purchase or dividend reinvestment plan (DRIP)?
No. Proofpoint doesn’t sell shares directly to the public and does not offer a DRIP.