NEW YORK, July 25, 2026, 5:10 p.m. EDT
- SoundHound ended Friday at $6.16, slipping 1.8% over the week.
- The $7 collar on the deal limits initial base issuance to close to 43.43 million shares.
- All foreign approvals have been finalized. The company is set to report second-quarter earnings on August 5.
U.S. markets did not open on Saturday. SoundHound finished Friday trading 12% under the lower collar in its ongoing acquisition of LivePerson NASDAQ:LPSN. Over the week, shares dropped 1.8%.
The collar applies a 10-day volume-weighted average price prior to closing. Should this average remain under $7, the deal formula will continue to use $7.
This sets the upper limit for the base number of shares. Any additional drop would lower the market value for recipients instead of raising dilution from the merger.
According to SEC pro forma figures, there are 43,428,571 shares at the lower collar level and 25,333,334 shares at the $12 upper collar.
| Pricing scenario | Deal divisor | Preliminary base shares | Illustrative block value |
|---|---|---|---|
| $12 upper collar | $12.00 | 25.33 million | $304.0 million |
| $7 lower collar | $7.00 | 43.43 million | $304.0 million |
| Friday’s close if the final VWAP remains under $7 | $7.00 | 43.43 million | $267.5 million at $6.16 |
The table presents an initial, example calculation. It does not account for cash substitutions, final adjustments to the balance sheet, or option impacts. The final exchange ratio is yet to be determined.
Based on Friday’s price, the block in the floor case had an approximate value of $267.5 million. This amount is $36.5 million less than the $304 million pool suggested by the filing.
The floor scenario represents 10.0% of SoundHound’s outstanding common shares as of May 7. The cap scenario stands at 5.9%.
SoundHound dropped 1.8% compared to the prior Friday. Trading volume on Friday totaled 32.1 million shares, surpassing its 65-day average.
Deal risk decreased on Friday after SoundHound announced that Bulgaria issued the last required foreign investment approval on July 20. With this, every foreign regulatory approval condition has been met.
Approval from LivePerson shareholders is still pending.
LivePerson ended the week at $1.53, falling 8.9%. Shares are now 54% under the $3.33 announcement price mentioned on Thursday.
The reduced price highlights three key factors. These are SoundHound’s closing VWAP, LivePerson’s cash adjustments, and the upcoming vote. The meeting will take place on August 20.
The letter, issued Thursday and signed by Chief Executive John Sabino, stated that shareholders could become part of a firm with “a strong balance sheet and no debt.” SEC
SoundHound is able to swap secured-note shares for cash. As of March 31, it reported having $216 million in cash and no outstanding debt. This means it faces a clear choice between maintaining liquidity and experiencing dilution.
SoundHound does not have an earnings release scheduled for next week. The company is set to announce its second-quarter financial results after the market closes on August 5, following Wednesday’s session.
Revenue for the first quarter increased by 52% to $44.2 million. Investors are expected to focus on cash levels, costs related to acquisitions, and underlying organic growth.
Significant risks persist. The merger continues to require approval from LivePerson shareholders. The ultimate consideration may be affected by cash elections and balance sheet changes. Possible increases in integration expenses, customer attrition, or higher cash outflows could negate the dilution cap.
For SoundHound investors, $7 does not represent a valuation floor. Instead, it marks the point at which base merger dilution ceases to increase.
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