Wedbush has a clear message to SoundHound AI stock investors

SoundHound AI (SOUN) just made its biggest strategic move of the year. And one of the stock’s most-watched analysts responded that same day with a message more nuanced than a simple “thumbs up” or “thumbs down.”

The deal itself is significant. But what Wedbush says next to it about the company’s shares is what investors need to pay attention to.

On April 21, SoundHound AI announced a definitive agreement to acquire LivePerson in an all-stock deal that values ​​the target company’s equity at approximately $43 million, a 22% premium to LivePerson’s 30-day volume-weighted average price, according to GlobeNewswire.

The total enterprise value of the transaction is approximately $250 million, which represents LivePerson’s discounted debt, which SoundHound plans to repay with a mix of cash and equity at its sole discretion. Upon closing, SoundHound also expects to receive approximately $74 million in LivePerson cash. The combined company is expected to emerge debt-free.