Salesforce acquiring Slack in $27.7B cash and stock deal

• Salesforce (NYSE:CRM) signs a definitive agreement to acquire Slack (NYSE:WORK) in a deal with an enterprise value of about $27.7B.
• Each Slack shareholder will receive $26.79 in cash and 0.0776 Salesforce shares per share.
• Salesforce expects the deal, which will be funded with a combination of new debt and cash on hand, to close during Q2 FY22.
• "Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it,” says Salesforce CEO Marc Benioff. “This is a match made in heaven. Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.”
• CRM shares are down 2.7% AH and Slack is down 3%, likely because investors were already expecting today's deal announcement.

Comments

[Adambombfx]

And Fastly beats $90 on a tear ........

Absolutely marvelous !

[Adambombfx]

How SWEET it is.......FSLY, closing in on that $90 handle once again !

[Ta0]

@Adambombfx

I'm tempted to sell $FSLY and lock in my profit. 😩😩😩

[Adambombfx]

@ That all depends on what your investment thesis is and how much profit gain you need to have. Some have a strict 20% profit and run rule and some have none what so ever.

[Ta0]

@Adambombfx

I have none whatsoever. I have no strict rules on profit. I'm happy with not losing money. However, Fastly dipped only because it lost Tik Tok. Once it recovers from that, it should be on its way back up to where it was. That's why I held on, and even bought more, when it kept dropping.

[Adambombfx]

How I played the deal !

Sold 1,000 shares of work at $43.30 on Dec,2

Bought 1,000 shares of RKT at $20.00 on Dec, 2

Bought 1,000 shares of LAZR at $20.00 yesterday Dec, 3rd
(edited)

[Ta0]

@Adambombfx

LAZR sounds interesting. My car also has sonar warnings on both sides, just in case I decide to change lanes and didn't see someone in my blind spot. Lidar is like having ears, to go along with vision (cameras).

[Adambombfx]

@Ta0

LAZR is the future ! Luminar was recently tapped by Intel's Mobileye to furnish sensors for its first-generation autonomous vehicle fleet.

I fully expect LAZR to be a double in one week and a triple in 2, this will follow in the shoes of my beloved NIO up from $1.43.

If anyone has any holdings in the EV space, then LAZR needs to be in your portfolio.

With a 25 year old Billionaire CEO, this will be a game changer.

Also, RKT, Rocket Mortgage will be a triple but will most likely take 2 to 3 years to get there.

LONG CRM,LAZR,and RKT

[Ta0]

@Adambombfx

I already own a partial position of $RKT at avg price of $21. I'm just waiting on it to drop a bit more so I can get it at a cheaper price.

When $CRM dropped a few days back, I plowed into it and picked up a full position. I really like this pick.

In the EV space, I have $TSLA, $INTC, $NVDA, $QS, $HYLN, and $QCOM. These companies do various things in regards to the EV industry. For example, $QCOM is involved with charging technology, $QS is for solidstate batteries, etc. etc.

I do not have a sonar/radar/lidar tech in my portfolio, so this one is actually good to own a small chunk of. Thanks for the idea. I'll wait till it drops into the $20s and scoop up a chunk.

[Trex Growth]

Considering Facebook paid 17 billions for WhatsApp, it was a steal in retrospect! Slack is a piece of crap and also overpaid for. Such a waste of shareholder money

[Wellington999]

no overlap and salesforce seems to value Slack much more highly than everybody else...Slack eps report just showed Slack slowing way down...

[redarrow5150]

@Wellington999 Slowing way down? WTF are you talking about.

[stockideaschannel]

IMO there will be good opportunity to enter CRM, I will increase CRM holdings. See you in 10 years, good luck everybody

[Trex Growth]

@stockideaschannel of course! Long

[MooneyMooney]

What's the deal if one has 100 $WORK stocks? What do they get and when?

What to do now with WORK stock? Just wait?

[bullhuskynole]

@MooneyMooney

Based on the current CRM stock price and yesterday’s closing price for WORK,(by my calculations) it looks like we would get the equivalent value of around $49 to $50 per share of WORK..... but the stock conversion part of the value will depend on the share price of CRM when the deal is finalized.(which will probably be at least a year from now),The hope of course is that CRM continues to rise which would effectively make it even better for WORK shareholders. I am not totally sure of my calculations, so please feel free to correct me if I’m way off)

[transnational_falafel_importer_exporter]

@MooneyMooney check my math, but my sheet tells me you will have $2,679 in cash PLUS 7.76 shares of CRM, which is approximately $1,800 market value. Therefore about $4,470-ish in total value, with the CRM share price being the oft-changing variable.

[redarrow5150]

@bullhuskynole CRM financial year is totally different. My understanding is the deal will close sometime first qtr of 2021

[sfoakbay]

odds another bidder shows up?

[Kirby Muxloe]

@sfoakbay

Would like to think Zoom should have a go!

[Adambombfx]

Too late for that .............

[CAPM is good enough]

Congrats to the WORK holders.

[GameBuzz]

Congrats to those who didn’t have their shares assigned last Friday for $28 after selling covered calls, like I, LOL! (As always, timing is everything.)

[ebizmedia]

SLACK IS NOT WORTH 27 BILLION DOLLARS. Sorry that was involuntary. I mean I have a hard time believing that Slack is worth 27 billion dollars when discord has better tech, more users, and is valued at what? I know 2 different companies but jesus.....slack is not THAT innovative...are they paying that price for all the enterprise customers they'll be acquiring from slack because that is the only way it's worth even close to that price. The tech is not that good and is done better in many other places....

[sircodesalot]

@ebizmedia Maybe short it then?

[BeenHoldin]

@ebizmedia Slack is not Discord.

[ebizmedia]

@BeenHoldin guess you didn’t read my entire thing did you?

[jeffk100]

Why are they paying squat in cash??? At least 90% should be paid w their overpriced stock for this overpriced deal. CASH AND DEBT???? Are you kidding????

[freshcupajoe]

Personally took a big loss exiting Slack after investigating the internals and realizing its rotten to the core. Who knew Salesforce would come in with a bailout. This was the perfect product at the perfect time and should have been Zoom 2.0. Shameful leadership. Slack didn't enhance their product for 3 years (with thousand+ engineers) while costs ran out of control.. they couldn't even increase their sales trajectory in a pandemic. A team of 30 good engineers could build a Slack clone at scale in 6 months. Won't ever invest in a SF based company again.. every company I know HQed there has a toxic culture and huge inefficiencies

[BeenHoldin]

@freshcupajoe That's one view, but Slack and Zoom are just not alike. I am glad Slack has stuck to what it knows best. The software keeps improving, and they've really changed our company collaboration internally and externally with Slack Connect. Slack is a beautiful piece of software with very, very minimal issues over the years.

That said, Slack needed an acquirer if they weren't into scaling out into more products/niches in the future.

[Zed Asset Management]

@freshcupajoe Slack was being killed by Microsoft Teams. Salesforce looks a bit desperate doing this deal. Who buys a platform that has lost users over the past year!

[redarrow5150]

@Zed Asset Management Well when your illegally bundling MSFT Teams much like they tried to do with browser. MSFT will lose the case.

[CAinvestor71]

Investors appear to have forgotten that Atlassian $TEAM sold some assets to Slack for a stake in company. I don't believe its priced in yet, which is surprising.

[Adambombfx]

@CAinvestor71

When Atlassian sold its chat services to Slack in 2018, the two companies said they would form a new partnership and with Atlassian leaving the chat space, a lot of people were skeptical about what that would really mean.

They have continued building on the strong foundation of their partnership’s success from the past two years, which has yielded tremendous shared customer momentum and impactful product integrations. Those strategic alliances between Slack and Atlassian have become the technology stack of choice for developer teams.

It will continue on just more good news for TEAM holders.

[sjm- cfa]

CRM must have really wanted (or needed) WORK to pay ~21-22X 21E sales. About 60% of deal paid in cash, 40% in CRM stock. Not sure how CRM makes the economics work- no price too high for growth in this interest rate environment? Wow.

[whoawie11]

I'm sorry, I'm a total noob. When is the best time to sell WORK?

[Im only here for the gains]

@whoawie11

Don’t

[K_7]

@Im only here for the growing dividends

why? since the deal is done, I can sell it to realize the gain, right? It should not matter now as long as the WORK price is at 46$(which is approximate the price given the deal)

[whoawie11]

@Im only here for the growing dividends

What’s the general thinking about the timing on selling for acquired companies?

[EverydayJoeSchmo]

Such a waste of money...

[Phil Dumfee]

There is an average of one covid death per minute right now,” During the FDA's three-hour meeting to decide who should get the vaccine, 180 people “will have died from covid-19". Waiting another 10 days for an emergency authorization will cost 20,000 lives. Red tape costs lives. Government doesn't move quickly when needed. Single payer would be a freaking nightmare.

[bayouinvest]

@Phil Dumfee Single-payer would ruin healthcare for the middle-class, people who have private insurance, and people who pay taxes. Private insurance already subsidizes Medicaid and Medicare.

[Uncle Chocolate]

At these terms, I'd rather take the risk and see Slack continue to fly solo.....

[WillyDogg]

Did the he Salesforce CEO really just say “Welcome to the Ohana”?! I love it!!! This company will go FAR with that #alohaspirit

[tflavin31]

@WillyDogg lol, that aloha spirit took 4 years to repair the kamama bridge. It looked like no progress in the 4 years I was stationed at Wheeler AFB

[adamjf]

What is with the buyout price? It isn't even close to the actual cost of my shares. I just bought last week and am up 58%, But based on current CRM price and the ratio, it is well below even my purchase cost. Looks like I'll be selling. If I wanted to buy CRM I would have just bought CRM.

[Alessandro_O]

@adamjf it's cash PLUS a fraction of CRM shares, the total is roughly $46

[wilfredian]

@adamjf As a CRM shareholder (ever since they bought my DATA shares) the feeling is mutual. I don't much like this deal at this price. If I wanted to buy into WORK I would have just bought WORK.

Benioff has an incredible ego and it's getting in the way of his business decisions. He has to have the biggest company in SF and doesn't care what happens to his shareholders. I remember when they were doing that stupid salesforce conference in SF, he covered the entire city in his stupid banners advertising his little event. This guy is an egomaniac.

I should have figured that the guy who bought Time magazine is suffering from delusions of grandeur, and sold those CRM shares I received.

[Ta0]

@wilfredian

If you sell your shares, I'm sure there will be many people who will be happy to buy them from you. Then you can pocket your profit and never have to think about $CRM again. Joy!!! 😊😊😊