Solid Upward Trend for Software AG’s Shares
The third quarter of 2007 saw a phase of consolidation for Software AG stock (ISIN DE 0003304002 / SOW). After a definite rise in the second quarter, due primarily to the acquisition of webMethods, the TecDAX-listed stock could not fully sustain the high level it reached in the previous quarter. Software AG’s share began the third quarter at €74.14 in Xetra trading and closed the quarter at €65.84. The benchmark indices TecDax and NASDAQ Composite held steady. Software AG stock gained 9.2 percent in the first nine months of the year while the TecDax rose 27.3 percent and the NASDAQ 11.5 percent.
After the positive trend at the end of the second quarter, Software AG stock continued to rise until mid- July. On July 19, it reached its high for the quarter and a new 5-year high at €77.20. Following the trend of a general softening of the market, the value of Software AG shares declined significantly until mid- August and reached a quarterly low of €65.61 on August 20. From mid-August, the mortgage crisis contributed to substantial uncertainty among market participants. Additional negative factors were the persistent weakness of the dollar and profit warnings from Software AG competitors.
Even after the end of the quarter, market uncertainty persisted and the share price showed increased volatility. A factual statement made by the Company was erroneously interpreted as a profit warning by financial analysts and led to severe price fluctuations on October 16. The announcement of the quarterly results and the confirmation of the whole-year targets on October 26 led the price to stabilize, reaching €67.40 on October 26.
Software AG‘s acquisition of webMethods was very well received by the capital markets. A total of 24 analysts in Germany, the United Kingdom and France currently cover Software AG’s stock. Sixteen of them have issued “buy” recommendations while one issued a “sell” recommendation. Seven analysts have decided to assume a waiting posture (“hold”) until the effects of the integration are reflected in the business figures.
Our investor relations activities during this quarter were focused on the U.S. due to the increased attention following the acquisition of webMethods, Inc.
We have held numerous roadshows in the U.S., Germany, UK and France in which we comprehensively explained our corporate strategy to investors and analysts. Our investor relations activities also included participation in a number of international capital market conferences: Merrill Lynch in San Francisco, Citigroup, UBS and Dresdner Kleinwort in New York, Deutsche Bank in London and Unicredit/HVB in Munich.