Shares of Casa Systems (NASDAQ:CASA) are up over 70% today after Verizon (NYSE:VZ) acquired a 9.9% stake in the company worth approximately $40 million. Casa operates as a provider of infrastructure solutions for “mobile, cable and fixed networks.” In addition, the company is actively involved with 5G service and provides products and services to expand connections. Before Verizon’s stake was announced, shares of CASA stock were down 31% year-to-date. With that said, let’s take a deeper look into Verizon’s bet on Casa.
Verizon Bets Big on CASA Stock
Verizon also signed a multi-year purchase contract with Casa. The contract will allow Verizon to leverage the 5G capabilities of Casa to expand its Mobile Edge Compute (MEC) service offering. MEC technology allows computing resources to move into cloud servers at the network edge. The network edge is “as close as possible to places where data is generated.”
Casa CEO and President Jerry Guo praised the contract, adding that, “Casa Systems is excited to be at the forefront of this shift towards a cutting edge, cloud-based strategy through this partnership with Verizon. This agreement validates our leadership in 5G Core and MEC and positions Casa Systems as a key champion for cloud-native 5G infrastructure in the United States.”
With Verizon on deck, let’s take a look at who else is betting big on CASA stock.
Who Else Is Betting Big on Casa Systems?
Tracking institutional ownership is important, as these large funds provide liquidity and price support for stocks. According to WhaleWisdom, which tracks all 13F filers, 88 funds own Casa, a decrease of six funds from the prior quarter. Based on the number of funds with ownership, Casa does not seem to be popular among institutional investors.
Furthermore, 13 funds reporting initiating a new position during Q4, while 19 funds reported closing their position. Finally, the company has a sky-high institutional put/call ratio of 4.37. This signifies that institutional investors hold more put options against Casa than call options by a wide margin. With that in mind, let’s go over Casa’s largest shareholders.
- Summit Partners: 34.12 million shares, or 40.40% ownership.
- Verizon: Shares unknown, 9.9% ownership.
- AllianceBerstein (NYSE:AB): 4.51 million shares, or 5.34% ownership.
- BlackRock (NYSE:BLK): 2.27 million shares, or 2.69% ownership.
- FMR: 1.94 million shares, or 2.30% ownership.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
