What Happened?
A number of stocks jumped in the afternoon session after the latest Consumer Price Index (CPI) report showed inflation cooling more than anticipated, fueling optimism for potential Federal Reserve interest rate cuts.
The November report indicated that annual inflation fell to 2.7%, significantly below economists' expectations of 3.1% and its lowest level since July. The Consumer Price Index, or CPI, is a key measure of inflation. This encouraging data was welcomed by investors, as sustained lower inflation could give the U.S. Federal Reserve more justification to lower interest rates in the coming year. Wall Street favors lower interest rates because they reduce borrowing costs for companies and can stimulate economic activity, making stocks more attractive. The positive news helped major indexes, including the S&P 500 and the tech-heavy Nasdaq, snap a four-day losing streak.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Consumer Subscription company Coursera (NYSE:COUR) jumped 4%. Is now the time to buy Coursera? Access our full analysis report here, it’s free for active Edge members.
- Online Marketplace company ACV Auctions (NYSE:ACVA) jumped 2.8%. Is now the time to buy ACV Auctions? Access our full analysis report here, it’s free for active Edge members.
- Consumer Subscription company Udemy (NASDAQ:UDMY) jumped 4.1%. Is now the time to buy Udemy? Access our full analysis report here, it’s free for active Edge members.
- Online Retail company Carvana (NYSE:CVNA) jumped 3.8%. Is now the time to buy Carvana? Access our full analysis report here, it’s free for active Edge members.
- Online Retail company Revolve (NYSE:RVLV) jumped 3.7%. Is now the time to buy Revolve? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Udemy (UDMY)
Udemy’s shares are very volatile and have had 24 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 22% on the news that its rival in the education technology space, Coursera, announced plans to acquire the online learning platform in an all-stock deal.
Under the terms of the merger agreement, Udemy stockholders were set to receive 0.800 shares of Coursera common stock for each share of Udemy they owned. This exchange ratio represented a 26% premium based on the average closing prices of both companies over the 30 trading days before the announcement. The transaction valued the combined company at approximately $2.5 billion. Following the merger, Udemy was to become a wholly owned subsidiary of Coursera. The companies expected the combination to create a comprehensive education technology platform with annual revenue exceeding $1.5 billion and achieve about $115 million in annual cost savings within two years of closing.
Udemy is down 23.5% since the beginning of the year, and at $6.31 per share, it is trading 37.6% below its 52-week high of $10.10 from February 2025. Investors who bought $1,000 worth of Udemy’s shares at the IPO in October 2021 would now be looking at an investment worth $229.27.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.