Confluent (CFLT) After Hours: IBM’s $11 Billion Buyout, Wall Street Downgrades and What to Watch Before the Opening Bell on December 10, 2025

Confluent, Inc. (NASDAQ: CFLT) has turned from a high‑beta growth stock into a classic merger‑arbitrage story almost overnight.

After Monday’s news that IBM will acquire Confluent for $31 per share in cash in an ~$11 billion deal, the stock has exploded higher and then settled into a tight band just below the offer price. ^[1]

By late trading after the bell on Tuesday, December 9, 2025, Confluent shares were hovering around $29.90, virtually flat on the day and sitting roughly $1.10 below the $31 cash offer – a discount of about 3.5% that now reflects the market’s view of the deal’s risk and timing.

At the same time, a wave of analyst downgrades to “Hold” / “Perform”, a surge in trading volume, and the first shareholder‑rights investigation into the fairness of the sale have all hit the tape on December 9. ^[2]

Below is a full look at what happened to Confluent stock after the bell on December 9, 2025 and what investors should know before U.S. markets open on December 10, 2025.

Confluent stock today: price, volume and after‑hours snapshot

As of late trading on Tuesday, December 9:

Last trade: about $29.90 per share.
IBM offer price:$31.00 per share in cash. ^[3]
Implied spread: roughly $1.10, or about 3.5% below the deal price.
Intraday volume: over 55 million shares traded, versus an average of around 5–6 million, with MarketBeat noting a 264% jump in volume versus the prior session’s ~7.5 million shares. ^[4]

The price behavior fits the classic pattern after a cash takeover:

On Monday, after IBM confirmed the deal, CFLT jumped around 29%, taking the stock from the low‑20s into the high‑20s. ^[5]
By Tuesday evening, the stock was trading tightly just below the $31 offer, as arbitrage desks and fast‑money traders replaced many former long‑term growth investors.

In other words: Confluent is now trading primarily as a merger spread, not a pure growth story.

IBM’s $11 billion cash deal sets the new ceiling

The new anchor for CFLT is IBM’s takeover proposal:

Deal terms: IBM will acquire Confluent for $31 per share in cash, valuing the company at roughly $11 billion in equity value. ^[6]
Premium: Reuters and other outlets note the offer represents roughly a 34–35% premium to Confluent’s pre‑deal share price. ^[7]
Strategic rationale: IBM describes Confluent as critical data infrastructure for AI, handling real‑time streaming data that underpin generative and “agentic” AI applications, and fitting squarely into IBM’s hybrid cloud and AI strategy. ^[8]
Timeline: Fitch and Reuters both highlight that the deal is expected to close by mid‑2026, subject to regulatory approvals and shareholder votes. ^[9]

For Confluent shareholders, that $31 cash price is now the practical upside cap in the near term – unless:

A competing bidder emerges, or
Regulators or shareholders push back strongly enough that the deal must be sweetened or re‑cut.

The roughly 3–4% discount to the offer price currently priced into CFLT reflects time value of money, regulatory risk and the possibility that the transaction does not close as planned.

Wall Street reacts: a wave of downgrades to “Hold”

December 9 has been busy for analyst activity on Confluent – and almost all of it points in the same direction.

Key rating and target changes on December 9, 2025

On and around December 9:

RBC Capital Markets
- Downgraded Confluent from “Outperform” to “Sector Perform”.
- Raised its price target from $30 to $31, aligning with IBM’s offer. ^[10]
Canaccord Genuity
- Downgraded CFLT from “Buy” to “Hold”,
- Lifted its target from $27 to $31. ^[11]
Needham
- Downgraded Confluent from “Buy” to “Hold” following the acquisition announcement. ^[12]
Wells Fargo & Company
- Cut the stock from “Strong Buy” to “Equal Weight” / “Hold”,
- Set a $31 target price, again matching the deal. ^[13]
Truist Financial
- Downgraded from “Strong Buy” to “Hold” in a research note. ^[14]
Other firms (Oppenheimer, UBS and others)
- Multiple reports compile a cluster of downgrades to variations of “Perform” or “Neutral,” with price targets converging on $31, essentially treating the acquisition price as fair value. ^[15]

Several analyst commentaries emphasize that IBM’s bid locks in most of Confluent’s near‑term upside, while still acknowledging the strategic logic of the transaction for both companies. RBC, for example, has described the acquisition as backed by strong strategic rationale, even while shifting to a more neutral rating now that upside appears capped. ^[16]

What this means heading into December 10

Expect fewer traditional “growth” upgrades and more mechanical rating changes as firms adjust models to the takeout price.
Consensus trackers still show Confluent as a “Buy” with an average 12‑month target around $30–$30.5 – but these are quickly going stale as new Hold ratings at $31 roll in. ^[17]
For traders, fresh downgrades tend to reduce volatility: when everyone agrees $31 is the ceiling, swings tend to compress around the spread – unless deal news changes.

Shareholder attorneys question whether $31 is enough

As usual in a large tech buyout, shareholder‑rights law firms have already started circling.

On December 9, 2025, the law firm Wohl & Fruchter LLP announced an investigation into the fairness of the proposed sale of Confluent to IBM for $31 per share. ^[18]

Key points from their release:

They highlight that the $31 sale price is below Confluent’s 52‑week high of $37.90, suggesting IBM may be buying at an “opportunistic” valuation. ^[19]
The firm says it is reviewing whether Confluent’s board obtained the best possible price for shareholders and whether the sales process was sufficiently competitive. ^[20]

These investigations are very common in U.S. M&A and do not automatically mean the deal is in trouble. However, they do add a few wrinkles for traders to monitor:

In some past deals, shareholder litigation has led to minor supplemental disclosures or occasionally small bumps in consideration.
They also spotlight the valuation debate: if Confluent’s fundamentals justify a higher stand‑alone price, investors may become less willing to accept a tight discount to $31.

More firms could launch similar investigations in the coming days, which will be worth watching in tomorrow’s pre‑market news flow.

Fundamentals still matter: what Q3 2025 says about Confluent’s business

Even though CFLT now trades like a merger‑arb play, the quality of the underlying business still matters, especially as a gauge of:

How likely regulators are to approve the deal, and
What the stock might be worth if the transaction collapses.

Confluent’s Q3 2025 results, reported on October 27, showed solid, if decelerating, growth with improving profitability:

Total revenue: around $298–299 million, up roughly 19% year over year. ^[21]
Subscription revenue: about $286 million, up 19% YoY, and ~96% of total revenue. ^[22]
Confluent Cloud revenue:$161 million, up 24% YoY, representing more than half of subscription revenue and a growing share of the mix. ^[23]
Margins: non‑GAAP operating margin improved by roughly 3 percentage points to around 9–10%, and free‑cash‑flow margin reached the high single digits. ^[24]

Management guided for:

Q4 2025 subscription revenue in the $295.5–296.5 million range.
Full‑year 2025 subscription revenue of $1.1135–1.1145 billion, with non‑GAAP operating margin of about 7%. ^[25]

On the flip side:

Confluent remains unprofitable on a GAAP basis, with negative net income and operating margins, even if the trend is improving. ^[26]
Short interest is meaningful: as of mid‑November, about 6.7–7% of the float, or ~20 million shares, were sold short, with a days‑to‑cover ratio around 3. ^[27]

These fundamentals help explain both why IBM wants Confluent – high‑growth streaming data infrastructure with a pathway to better margins – and why some valuation models see downside if the deal breaks.

Forecasts and scenarios: what if the IBM deal closes – or collapses?

Street forecasts and target prices

Before the acquisition news fully filtered through the system, aggregate data from sites like StockAnalysis showed:

A “Buy” consensus rating on Confluent.
An average 12‑month price target around $30–$30.2, with targets ranging roughly from $22 to $40 per share. ^[28]

After today’s downgrades, the effective “target” has converged on $31, because:

Most new reports now simply peg fair value to IBM’s agreed price, not to a stand‑alone DCF or multiple‑based model. ^[29]

Trefis “Confluent Stock To $21?” – the bear‑case valuation

A December 9 article from Trefis titled “Confluent Stock To $21?” steps back from the M&A headlines and asks what CFLT might be worth on fundamentals alone. ^[30]

The piece notes that:

Confluent’s revenue has grown about 22% over the last 12 months, from roughly $916 million to about $1.1 billion.
Three‑year average top‑line growth sits near 27–28%. ^[31]

While the full model is behind a paywall, the framing suggests that in a no‑deal scenario, Trefis sees a fair value significantly below $31 – potentially around the low‑20s per share (this is an inference based on the article’s title and partial data). ^[32]

This creates a clear risk‑reward tension heading into December 10:

If the IBM deal closes as planned, CFLT holders receive $31 in cash, roughly 3–4% above where the stock trades after hours.
If the deal collapses, some fundamental models imply downside into the low‑20s, especially if market multiples contract.

Macro backdrop: the Fed meeting could still matter for the spread

Normally, an all‑cash takeover like IBM–Confluent would make CFLT less sensitive to macro news. But merger spreads can still move with risk sentiment – and this week brings a big macro catalyst:

The Federal Reserve’s December FOMC meeting runs December 9–10, with a decision and press conference scheduled for Wednesday, December 10. ^[33]
Markets broadly expect another quarter‑point rate cut, but are unsure about the path of cuts in 2026.

If the Fed delivers a more hawkish‑than‑expected message, risk assets could wobble, and arbitrageurs may demand a slightly wider spread on deals like IBM–Confluent to compensate for volatility. Conversely, a dovish surprise could tighten spreads, nudging CFLT a bit closer to $31.

What to watch before the market opens on December 10, 2025

Heading into Wednesday’s session, here are the key things traders and investors should monitor:

1. The merger spread vs. $31

Is CFLT still sitting around 3–4% below $31, or does it tighten to 1–2%?
A narrower discount suggests the market is increasingly confident the IBM deal will close on current terms.
A widening discount could signal emerging regulatory, financing or political concerns – or simply a risk‑off move tied to the Fed.

2. New headlines on regulatory or shareholder scrutiny

Watch for additional law‑firm investigations, proxy‑advisory commentary or activist statements questioning the fairness of the sale price. ^[34]
Any hint of regulatory resistance to IBM’s push in AI infrastructure or cloud could also move the stock. IBM has argued that the acquisition is strategically important but financially manageable, and Fitch has already said IBM’s credit rating is unaffected by the deal, which is a modest positive. ^[35]

3. Follow‑through on analyst actions

Expect more “clean‑up” downgrades where banks move from Buy/Outperform to Hold/Neutral and lift price targets to $31.
Pay attention to any outlier calls that challenge the deal price as too low or flag non‑trivial deal risk.

4. Trading behavior and short covering

With 6–7% of the float sold short as of mid‑November, sustained trading near $31 may pressure shorts to cover, especially if the spread tightens. ^[36]
The extremely high volume on December 8–9 suggests many positions have already been reshuffled, but intraday volatility could still appear as arbitrage funds fine‑tune their exposure. ^[37]

5. IBM’s stock reaction

Because IBM is the acquirer, its shares often act as a real‑time barometer of market confidence in the deal.
So far, IBM stock has held up reasonably well, with some coverage arguing that Confluent will enhance IBM’s AI, data and hybrid cloud platform and support long‑term earnings growth. ^[38]

A sharp drop in IBM shares could signal rising concerns about integration risk or overpayment, both of which might ripple back into CFLT’s spread.

Bottom line for Confluent shareholders and traders

As of after hours on December 9, 2025, Confluent has entered a new phase:

Story stock ➜ takeover stock
IBM’s $31 cash offer has effectively capped near‑term upside, with CFLT now trading primarily as a merger‑arbitrage play at a mid‑single‑digit discount to the deal price. ^[39]
Wall Street is neutral, not bearish
The flood of downgrades from Buy/Outperform to Hold/Sector Perform is mostly mechanical, reflecting the limited upside to $31 rather than a sudden collapse in confidence in Confluent’s technology or growth prospects. ^[40]
Fundamentals remain solid – but matter most if the deal breaks
Q3 results show a high‑growth cloud business with improving margins, yet still unprofitable under GAAP – a profile that leaves room for debate on what CFLT is worth without IBM’s bid. ^[41]
Risk‑reward is now binary
In simple terms, today’s buyers are largely betting that IBM closes at $31 and pocket a few percent plus the time value of money. Those who worry about antitrust, regulatory or shareholder pushback must weigh the potential downside into the low‑20s implied by some fundamental models if the transaction fails. ^[42]

Heading into the December 10, 2025 open, the crucial questions for Confluent investors are not about quarterly beats and raises, but about:

The durability of IBM’s commitment to the deal,
The regulatory and political environment for large AI and data‑infrastructure acquisitions, and
Whether $31 truly reflects Confluent’s long‑term strategic value.

For now, the market’s verdict is cautious but constructive: CFLT trades like a deal that will probably close — just not at 100% certainty.