Salesforce.com is reportedly in negotiations to acquire Slack Technologies (WORK), a manufacturer of workplace collaboration software, as both real face more competition from Microsoft (MSFT). Wednesday Slack stock popped regarding the news while Salesforce stock fell.
Term regarding the merger that is possible was reported by the Wall Street Journal. Today the news headlines delivered Salesforce stock down 5.4% to shut at 246.82 on the currency markets. A appetite that keeps growing acquisitions is a drag on Salesforce stock. The enterprise software maker acquired Tableau computer software for $15.7 billion as part of an deal that is all-stock 2019.
But Slack stock soared 37.6% to close at 40.70. Slack is defined to report quarter that is October-ended on Dec. 2.
Salesforce could step-up, Cowen analyst J. Derrick Wood stated in a report to customers “As history shows, CRM just isn’t afraid to cover up for top-tier assets,” Wood stated. “A 40% premium (for Slack) would add up to the lowest $40 take-out cost, or nearly a $25 billion market value. Salesforce just has $9 billion in cash, so substantial equity would have to be involved.”
Growing competition with Microsoft happens to be an overhang on Slack earnings since its listing that is direct in 2019. Microsoft Teams tools and Slack’s talk software try to replace e-mail.
Slack Stock: Past Approach From Microsoft
Microsoft approached Slack in 2016 about an acquisition but backed off. Instead, Microsoft chose to build its teams collaboration software up. Amid the coronavirus, use of Microsoft Teams has surged for videoconferences.
Microsoft provides Teams tools 100% free included in its online Office 365 item, Oppenheimer analyst Tim Horan said in a his note to clients.
“Microsoft is actually the juggernaut in cloud-based business communications,” Horan said. “The number of groups users that are daily active swelled to 115 million in November, driven by way of a surge in cloud adoption as more and more people work remotely. This dwarfs Slack’s 15 million day-to-day active users.”
Horan added, “Microsoft has bundled collaboration services for free into Office 365 tiers, with higher-level tiers telephony that is including more video conferences abilities. In reaction, Slack has filed an complaint that is antitrust the European Union explaining this behavior.”
Salesforce Inventory: Facing More Competition From Dynamics
Salesforce, meanwhile, additionally faces more competition from Microsoft’s Dynamics product in the consumer relationship administration pc software market, analysts state. Microsoft is putting more salespeople behind the Dynamics company. Wedbush analyst Daniel Ives states a merger that is salesforce-Slack put stress on Alphabet’s (GOOGL) Google to help make an acquisition. Salesforce.com is reportedly in negotiations to acquire Slack Technologies.