Shares of software development platform GitLab, Inc. (GTLB) fell about 4% in Friday's early premarket session, giving back part of the 10% gain from the previous session.

The premarket slide of GitLab stock is potentially due to profit-taking following Thursday's jump, which came after StreetInsider reported, citing people familiar with the matter, that Datadog was exploring a fresh takeover bid for GitLab. Datadog, a provider of cloud applications monitoring and security platform, had reportedly courted GitLab previously in July 2024. 

A Reuters report said then that GitLab worked with investment bankers on a sale process and received takeover interest from peers, including Datadog. The StreetInsider report attributed the renewed interest from Datadog to leadership changes at GitLab and the company's recent strong quarterly performance. The report also noted that Sid Sijbrandij, who retains 51% voting control, would ultimately decide on any sale. Sijbrandij announced his decision to step down as CEO in December last year, giving the reins to former New Relic CEO Bill Staples.

Gitlab has a market capitalization of $8.05 billion based on the stock's closing price of $48.27 on Thursday. Notwithstanding Thursday's jump, the per-share price is still at a 20% discount to the $60-per-share offer from Datadog, which has a valuation of $52.72 billion.

On Stocktwits, retail sentiment toward GitLab stock turned to 'extremely bullish' by early Friday from 'bullish' the day before, and the message volume on the stream was 'extremely high.'

One watcher said a $70 per share takeover offer may be incoming.

Another user noted huge volume throughout the past weeks, potentially suggesting someone was buying at a low price around a support level.

GitLab stock has lost over 14% this year, while Datadog stock has done relatively better with a nearly 6% gain.

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