scheplick

Salesforce bought Slack for $27 billion. What next?

NYSE:CRM   SALESFORCE.COM INC
I think the Salesforce acquisition of Slack was genius. Why? They now have access to all of Slack's clients and companies. They can integrate all Salesforce products into it and go right after them to upsell them Salesforce products. This is a great attempt by Salesforce to keep growing revenues. However, there is more to this story...

Before we get to the bear case, let's dive into one more interesting thing:

Salesforce is officially going after Microsoft and Microsoft is going after Salesforce. Microsoft bought LinkedIn to essentially build its own CRM system for sales and contacts. They saw what Salesforce was trying to do. Now however, Salesforce is flipping the script. Imagine the following:

Slack docs
Slack spreadsheets
Slack video
You name it

They are now going right after Microsoft Word and Excel. Also, to some degree, Google Business Solutions. That's where the bear case begins, however.

This space is extremely competitive now and it's requiring more and more risk. A $27 billion acquisition? Salesforce could not build their own Slack for $27 billion? Salesforce could not find another cheaper company to acquire? Meanwhile companies like Discord are growing fast and coming for Slack.

It seems that Salesforce's recent weakness, and point of this chart that Salesforce will return to its Volume Profile node, is that some long-term investors and holders are slightly weary of the cash spend and M&A mania that Salesforce has been on.

They keep buying, rather than growing organically.
I work at TradingView helping to build charts, tools, and software for everyone interested in financial markets.

Twitter: https://twitter.com/scheplick
Blog: https://scheplick.com/

Comments

good job, keep it up
+1 Reply
I've started following and believing in CRM, I'm a late adopter ... with that said, I think they are going to head up high, and the recent last 7 days show indication that it's spiking small amounts up, meaning it's willing to go up... and I think it's going to head back to where it was recently ... also the drop in price since the acquisition is now indicating a buy the dip situation ... so I actually think it's going to head up high really soon, the RSI is low meaning it's about to go up ... at least my opinion ... as soon as we see a little dip in the Mkt as a result of no fiscal stimulus 😊 I'm buying more of the dip ...
+1 Reply
So far this tracks just as you depicted.. next move should be down or slightly up and then down
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Wow, this was a great read. I was bullish on $CRM because of this acquisition but you present a very good bear case. Thanks!
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Excellent chart and TA. Thank you!
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Nice charting!
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Don't we call this a island gap where the price starts to push up not down?
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Dunno..looks iffy to me. I had just studied the chart before reading this. Thanks for explaining why the chart looks so..well..not CRMish.Strong support at bottom of that gap..if CRM falls under it, may be a bit of a trip down. CRM broke up from a bearish and narrowing rising wedge when joinng the DOW...unusual for price to break up, especially so far up, after traveling in a significant RW. I never bought it for this reason and beat myself up for a while cos it just kept going up. Now waiting on the trip down to end before I contemplate a buy. Thx again
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great job
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