Shares of Casa Systems Inc. rocketed 49.1% to pace all premarket gainers Monday, after the communications infrastructure company announced that Verizon Communications Inc. will take a 9.9% stake in the company as part of a multi-year purchase contract. Under terms of the contract, Verizon will buy $40 million worth of Casa stock, and Casa will provide its 5G Core Network Functions to Verizon. That will make Verizon the third largest shareholder, according to FactSet data, behind the 12.8% stake owned by Chief Executive Jerry Guo and the 40.4% stake owned by Summit Partners LP. “This announcement is an important milestone for our 5G Core and Security Gateway technology, as well as the growth potential of our business,” Guo said. The stock, which matched a 19-month closing low as recently as April 12, has tumbled 31.4% year to date through Thursday, while the S&P 500 has slipped 7.8%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.