This Fund Just Dumped Its Entire $10 Million Stake in Five9 — Here's Why

Core Insights - Scalar Gauge Management sold its entire stake in Five9 for an estimated $10.6 million in the third quarter, liquidating 399,717 shares [1][2] - Five9's stock price closed at $24.28, reflecting an 18% decline over the past year, underperforming the S&P 500's nearly 17% gain during the same period [3] - Scalar Gauge's exit from Five9 indicates a broader trend of pulling back from cloud software investments amid compressed enterprise valuations [6][7] Company Overview - Five9 is a leading provider of cloud software for contact centers, facilitating customer interactions across various digital and voice channels [5][9] - The company reported a trailing twelve months (TTM) revenue of $1.1 billion and a net income of $8.8 million [4] Market Context - Scalar Gauge noted that software multiples have fallen below 2022 troughs despite stronger profitability, indicating that valuation pressures are influencing market behavior rather than fundamentals [7] - The firm continues to view enterprise software as an attractive segment but is temporarily reducing exposure while awaiting market stabilization [7][10]