Freshworks Falls 60% in a Year as $7.5 Million Sale Shrinks Stake to 3.1% of This Portfolio's Assets
Key Points
Gagnon Securities sold 635,807 shares of Freshworks in the fourth quarter; the estimated transaction value was $7.51 million based on quarterly average pricing.
Meanwhile, the quarter-end position value for Freshworks decreased by $6.89 million, reflecting the combined impact of trading and price movement.
Post-trade, the fund holds 1,230,011 shares valued at $15.07 million.
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Gagnon Securities reported selling 635,807 shares of Freshworks (NASDAQ:FRSH) in its February 12, 2026, SEC filing, an estimated $7.51 million trade based on quarterly average pricing.
What happened
According to its SEC filing on February 12, 2026, Gagnon Securities reduced its position in Freshworks by 635,807 shares. The estimated value of the shares sold was $7.51 million, calculated using the average closing price over the quarter. After the sale, the fund’s stake was 1,230,011 shares, with a quarter-end value of $15.07 million. The overall position value dropped by $6.89 million, a change driven by both trading activity and price movements.
What else to know
- This sale reduced Freshworks to 3.07% of Gagnon Securities’ reported U.S. equity AUM.
- Top five holdings after the filing:
- NASDAQ:CDNA: $33.44 million (6.9% of AUM)
- NASDAQ:WGS: $32.97 million (6.8% of AUM)
- NYSE:AL: $31.92 million (6.6% of AUM)
- NASDAQ:ENSG: $31.45 million (6.5% of AUM)
- NYSE:AMRC: $24.40 million (5.0% of AUM)
- As of February 12, 2026, Freshworks shares were priced at $7.04, down 60.4% over the past year and trailing the S&P 500 by 73.35 percentage points.
Company overview
| Metric | Value |
|---|---|
| Price (as of market close 2026-02-12) | $7.04 |
| Market capitalization | $2.05 billion |
| Revenue (TTM) | $838.81 million |
| Net income (TTM) | $183.72 million |
Company snapshot
- Freshworks offers cloud-based software-as-a-service (SaaS) products, including customer support, IT service management, and CRM solutions.
- The company generates revenue through subscription-based licensing of its software platforms to businesses worldwide.
- It targets small to midsize enterprises and organizations seeking scalable, modern business software applications.
Freshworks operates as a global provider of SaaS solutions, focusing on modern customer and employee engagement platforms. The company leverages a scalable subscription model to drive recurring revenue and serves a diverse international client base. Its competitive advantage lies in delivering user-friendly, integrated software suites tailored to the evolving needs of growing businesses.
What this transaction means for investors
Capital allocation tells you what managers believe about durability, not just price action. When a position that has been hammered by the market gets trimmed again, it signals conviction that’s being recalibrated and not necessarily abandoned outright.
Freshworks just closed 2025 with revenue up 16% to $838.8 million and fourth quarter sales of $222.7 million, up 14% year over year. Net dollar retention improved to 108% in Q4, and adjusted free cash flow reached $223.1 million for the year. In the earnings release, CEO Dennis Woodside touted better-than-expected growth and profitability metrics for the fifth consecutive quarter. That is not a business in free-fall operationally.
Still, the stock is down 60% over the past year, and the position now represents just 3.1% of reportable assets. Compare that with larger weights in CDNA, WGS, and Air Lease, which have either stronger momentum or clearer cyclical tailwinds. Regardless, Gagnon is still holding onto a roughly $15 million stake here, making this look less like panic and more like portfolio triage.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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