(Bloomberg) -- Barracuda Networks Inc., which provides cloud-computing and data-storage services, is working with Morgan Stanley to seek potential buyers, according to people familiar with the matter, after losing more than two thirds of its value amid disappointing earnings.
The investment bank has been asked to gauge interest in Barracuda, which has a market value of about $571 million, according to the people, who asked not to be identified because the information isn’t public.
No buyers have emerged, and a deal isn’t imminent and may not happen at all, the people said. Barracuda dropped 35 percent on Jan. 8 after reporting disappointing third-quarter earnings. The company’s struggles may further impede a deal, said the people, as valuation expectations between potential acquirers and Barracuda have widened.
Representatives for Barracuda and Morgan Stanley declined to comment.
Barracuda has fallen about 68 percent in the past 12 months. Shares plummeted after the Campbell, California-based company reported third-quarter gross billings -- an indication of future revenue -- fell 2.8 percent year over year on Jan. 7. Several equity analysts, including Imperial Capital LLC’s Michael Kim and Guggenheim Capital LLC’s Ryan Hutchinson, downgraded the stock after Barracuda released its quarterly results.
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