On Wednesday, Salesforce.com Inc (CRM) fell -8.52 percent to $220.78 while Slack Technologies Inc (WORK) dropped -2.58 percent to close at $42.71. The customer relationship management (CRM) technology specialist reported the speculation that had been going on for almost a week by formalizing an agreement to buy the collaborative telework solutions specialist Slack Technologies.
The cash and stock offer by the U.S. firm to buy Slack values it at $27.7 billion on yesterday’s rates. For each Slack shares, Slack shareholders will receive $26.79 in cash and 0.0776 Salesforce shares. The largest deal for Salesforce since its launch in 1999, will allow the CRM giant with its Teams solution to compete more directly with Microsoft, which dominates the telecommunications sector. With its Dynamics 365 CRM service solution, Microsoft also competes with Salesforce in the CRM industry. Slack had already been approached in 2019 before its IPO by Salesforce and also by Microsoft.
Salesforce has also announced the forthcoming departure of its CFO, Mark Hawkins, effective on February 1. On the profit hand, compared to a loss of $109 million a year ago, Salesforce posted third-quarter net income of $1.08 billion. Compared to $0.75 a year earlier, earnings per share were $1.74 on an adjusted basis. Revenues climbed by 20% to $5.42 billion. Those numbers were above consensus. Salesforce forecasted an adjusted EPS of 73 to 74 cents per share and revenue of between $5.67 billion and $5.68 billion for the fourth quarter. Analysts expect better profits (86 cents per share) but less ($5.51 billion) in revenues. Salesforce increased its annual revenue estimate beyond 2020 to $21.11 billion in 2021 and $25.5 billion in 2022.
Box Inc (BOX) dropped -8.79% to $16.91 following reporting better-than-expected quarterly sales with the growth of telework and distance learning on Tuesday. Nevertheless, forecast by the online data storage specialist at the beginning of the quarter came out a little short.