Jay Chaudry, the President and CEO of cybersecurity company Zscaler, has refuted rumors of an acquisition bid from Broadcom. In a statement posted on LinkedIn, Chaudry made it clear that neither he nor the Zscaler board of directors have sought or accepted any offer to acquire the company. This comes in response to speculation that Broadcom had put forth a $38 billion bid for Zscaler, a claim that originated from an obscure Substack post with no identified author.
The unsubstantiated rumors circulating on the “Cyber’s Substack” site, which appears to be at least partially generated by AI, have caused concern among Zscaler employees. The site has published only three posts, all centered around Zscaler, and has inaccurately claimed that Broadcom’s bid for data center software provider VMware is under scrutiny by competition authorities, despite the fact that the deal closed in November 2023.
Chaudry reassured stakeholders that Zscaler remains at the forefront of technological disruption in the zero trust security space and encouraged readers to refer to the company’s investor relations page and SEC filings for accurate information. He also referenced Zscaler’s past dealings with Broadcom, including a $15 million agreement in 2020 following Broadcom’s acquisition of Symantec’s enterprise security business.
Looking at the broader cybersecurity M&A landscape in 2024, activity has been relatively subdued compared to previous years. Notable deals include CyberArk’s $1.5 billion acquisition of Venafi, Cohesity’s $3 billion deal for Veritas’ data protection business, and Crowdstrike’s purchase of Flow Security. However, overall exit value for information security startups has declined in recent years, dropping from over $30 billion in 2021 to less than $7.5 billion combined in 2022 and 2023.
Despite the lack of major M&A activity in the cybersecurity sector so far in 2024, investor focus remains on AI-related technologies. It is worth noting that certain market movements, such as those potentially influenced by unsubstantiated rumors from sources like the Cyber’s Substack site, can impact the price of shares for companies like Zscaler.
In conclusion, Jay Chaudry has firmly denied rumors of an acquisition bid for Zscaler, emphasizing the company’s position as a leader in zero trust security. The cybersecurity industry’s M&A landscape in 2024 has seen subdued activity compared to previous years, with a shift in investor attention towards AI technologies. It is crucial for stakeholders to rely on verified sources for accurate information in light of potential market manipulation.
Article Source
https://www.thestack.technology/zscaler-ceo-shoots-down-broadcom-buyout-rumours/