Workday Had Its Best Day in a Decade on a Take-Private Report

Workday rose roughly 17 to 18% on a report that Silver Lake is interested in taking it private, a move large enough to halt trading for volatility and its best single day in ten years. The reported deal values the company near $43 billion.

Read the gap carefully

These are two distinct figures and it is worth being explicit about that: $43 billion is the value attributed to the reported transaction, and $51.1 billion is where the company's market capitalization sat after the surge. The chart is not a premium calculation, and treating it as one would invert the meaning.

A market cap that ends the day above the reported deal value tells you investors either expect a higher number or do not expect the deal at the reported one. Either reading is more interesting than the headline percentage.

What is actually established

Reported interest is not an agreement, a price, or a process. No transaction has been announced. What the day established is the size of the gap between where Workday had been trading and where a buyer is reported to see it, and that gap is now public whether or not anything follows.