The cloud-based software company, Salesforce held talks on Wednesday to buy the office communications app, Slack. Slack’s current market capitalization is expected to be at $16.876 billion which increased to $20 billion following the WSJ report.
Impact On Shares Of Slack, Salesforce & Microsoft
Post the news, shares of the communication platform, Slack soared more than 25% to $36.95. Its shares have been ranging between $15.10 per share to $40.07. However, shares of San Francisco-based Salesforce slipped 4% to around $251 while the shares have grown 55% year to date.
Salesforce is expected to release earnings on December 1. Analysts estimate it to make a revenue of $5.25 billion with earnings per share of 75 cents.
Microsoft, which competes with Slack through its Teams software, saw a slight decline in its price as the news was released. In 2019, when Slack was about to go public, it had said that its primary competitor was Microsoft Corporation.
The tech giant Microsoft also competes with Salesforce in software for tracking customers. Supposedly, Microsoft planned to buy Salesforce, but the deal never came through. Eventually, Microsoft launched the Teams communications app.
Previous Acquisitions by Salesforce
Salesforce is not new to acquisitions. The company has been investing to buy growing companies, utilizing its market cap growth. It bought the document sharing software, Quip for $750 million in 2016.
The next year marked the firm’s biggest acquisition ever at that time with the acquisition of MuleSoft, which provides integration software for connecting applications, for $6.5 billion. In 2019, Salesforce spent double that amount to buy the data visualization company, Tableau, for $15.3 billion.
Why Would Salesforce Want To Buy Slack?
Currently, Salesforce only has Salesforce Chatter as a social tool in its portfolio. Having Slack would give Salesforce greater synergy while planting workflows. While Salesforce’s products range from sales, service, marketing, etc, Slack would enable Salesforce to build streamlined workflows.
For Slack, being acquired by a corporate giant would help deal with the tougher competition posed by tech companies like Microsoft.
While there is still no certainty if the deal would come about, but if it does, it would mark one of the biggest software deals. Some of the largest acquisitions to date include IBM’s acquisition of Red Hat in 2019 for $34 billion, Microsoft’s purchase of LinkedIn in 2016 for $27 billion, and Facebook’s purchase of WhatsApp for $19 billion in 2014.
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
