Salesforce’s co-CEOs told Jim Cramer the Slack acquisition is working out well and positioning the company to better handle a hybrid-work environment.
The co-CEOs of Salesforce (CRM) told Jim Cramer they’ve been pleased with their purchase of Slack Technologies, arguing the company’s flagship customer relationship management platform, Customer 360, is even more valuable to clients now that it owns the chat software maker. Why we care Salesforce completed its roughly $27 billion deal for Slack in July 2021 — its largest acquisition to date, following multi-billion dollar deals for MuleSoft in 2018 and then Tableau a year later. We recognized and supported the rationale behind Salesforce’s move: using the messaging app as a thread to better stitch together its entire enterprise software suite. It also helped enhance their position against fellow Club holding Microsoft (MSFT) and its Office 365 offering. The price Salesforce paid, though, was likely a bit steep, valuing Slack at more than 24 times estimated revenue for the next year when it was announced in December 2020. For that reason, it’s especially important to watch how it plays out now that the two companies are under the same (digital) roof. Management made a big bet, and shareholders need them to deliver on it. We have a 1 rating on Salesforce shares, meaning we’d be buyers here. The stock has been completely out of favor on Wall Street since November, when the Federal Reserve adopted an aggressive policy stance that’s bad news for growth-oriented names like Salesforce. That said, we’re believers in the company for the long haul as the business world moves to the cloud. Companies like Salesforce are integral players in that digitized world. We think owning Slack makes Salesforce even more essential. What they’re saying now In an interview at Salesforce’s « World Tour NYC » event Thursday, co-CEOs Marc Benioff and Bret Taylor said Slack has, so far, surpassed internal forecasts and made the case it will keep thriving as remote work sticks around past the pandemic.
