Salesforce Inc (CRM)

[DiscoverGold]

Salesforce Reportedly Kicks Tires on Slack Acquisition
By: TheStreet | November 25, 2020

• Salesforce is reportedly in talks to purchase Slack, which has a market capitalization of $17 billion.

Shares of work messaging app Slack Technologies (WORK) jumped more than 7% Wednesday after the company was reportedly approached for an acquisition by Salesforce (CRM).

Any deal would value Slack above its current $17 billion market capitalization, The Wall Street Journal reported. It would represent Salesforce's largest acquisition to date.

There is no guarantee that the acquisition talks will lead to a deal and Salesforce could ultimately choose a different target, sources told the Journal.

Slack jumped 7.1% to $31.68 on the news before being halted due to volatility. Salesforce shares dropped more than 3% on the news to $252.70, though the stock has risen about 55% year to date.

Requests for comment from both Slack and Salesforce weren't returned immediately Wednesday.

Earlier this month, Saleforce was downgraded to equal-weight from overweight by analysts at Morgan Stanley on valuation concerns.

"At CRM's current growth, scale and market cap, an increasing focus on [free cash flow] and earnings is likely necessary for further price appreciation," said Morgan analyst Keith Weiss.

"However, subscription model dynamics and management's growth philosophy may make that difficult near-term, pushing us to an [equal-weight] rating."

Salesforce is scheduled to report earnings on Dec. 1, with analysts estimating earnings of 75 cents a share on revenue of $5.25 billion.

Salesforce was added to the Dow Jones Industrial Average in late August.

At the time, Morningstar analyst Dan Romanoff said "we believe Salesforce.com represents one of best long-term growth stories in software. Salesforce.com has assembled a front-office empire that it can build on for years to come.”

Read Full Story »»»

DiscoverGold