Black Box Corporation (NASDAQ: BBOX) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The gains are ultimately a follow up on the massive growth the stock saw on Friday as the result of a data center deal. Today, we’ll talk about:
- The deal;
- what we’re seeing from BBOX as a result; and
- what we’ll be watching for ahead.
BBOX Continues Skyward On Data Center Deal
As mentioned above, Black Box is having an incredibly strong start to the trading session in the pre-market hours this morning, following up on the gains that we saw Friday. Ultimately, the gains are the result of an announcement made Friday surrounding a data center partnership. In a press release, the company announced that it would be partnering with one of the world’s most renowned and prominent social media organizations with regard to its global data center expansion program. In fact, under the agreement, the potential data center work could come to a total of $300 million or more for BBOX, making the deal the largest deal in the company’s history.
The first part of the award has to do with a nearly one million square foot data center that will be worth more than $10 million. This award will mark the beginning of a five to ten year strategic relationship with the social media company, which at the moment, is working to aggressively expand its data center abilities. However, that won’t be the only center built. In fact, conversations are already underway between the two parties surrounding additional data center locations. In a statement, Joel Trammell, President and CEO at BBOX, had the following to offer:
This strategic partnership has the potential to be one of the largest in Black Box history… The ability to deploy sophisticated data center solutions leverages our intelligent digital edge strategy. Our global scale, repeatable and predictable governance framework, deep technical expertise, and core values alignment differentiated us from our competition and were instrumental in our selection. We look forward to a successful project delivery for this first U.S. data center, and are excited to continue and expand our journey together with our partner.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of Black Box, the news proved to be overwhelmingly positive. After all, with the new partnership, the company will start with a more than $10 million data center and has the potential to take in business amounting to $300 million. That’s enough to excite any investor! So, it’s no surprise to see that the stock is screaming for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:02), BBOX is trading at $2.74 per share after a gain of $0.71 per share or 34.98% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on BBOX. In particular, we’re interested in following the progress surrounding the new data center project as well as future projects that could be coming down the line. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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