Given theeight straight days of gains for Software stocks, one could argue that the death of code-base companies was greatly exaggerated(cough -dead-cat bounce - cough), but not every boat is being lifted by this massive short-squeeze rebound
JPMorgan Trader Brian Heavey said earlier that it"seems we are moving from 'SAAS is dead' to 'maybe they can co-exist'", but it appears one software firm is indeed 'no more'.
In July 2021, Thoma Bravo took customer-experience (CX) software leader Medallia privatein a $6.4 billion all-cash leveraged buyout.
Thoma Bravo and its co-investors contributed roughly $5 billion of equity, while Blackstone and other private-credit lenders provided $1.8 billion of debt.
The deal reflected the era’ssky-high software valuations and Thoma Bravo’s aggressive playbookof buying mature SaaS platforms with heavy leverage.
By 2026, the investment had become one of private equity’s most visible busts.
Medallia’s growth stalled in a crowded CX market where survey-based platforms faced commoditization and slower enterprise spending.
PE Insights reported two weeks agothatdebt servicing costs ballooned to nearly $300 million(carrying around $3 billion in total debt).
Annual earnings hovered around just $200 million- insufficient to cover interest - leaving the company struggling to deleverage.
Around a month ago,Barron's reportedthat lenders were under serious pressure asBlackstone, the lead creditor, repeatedly marked down its large loan position:from par to the high 80s in mid-2025, then to roughly 70 cents on the dollar by February 2026, with further declines reported into the 60s.
Source: ZeroHedge News
