Slack Stock Jumps On News Of Potential Acquisition By Salesforce

Slack’s stock rocketed over 24 percent on Wednesday (Nov. 25) on a report that Salesforce had discussions to acquire the firm, while Salesforce stock fell over 4 percent, CNBC reported.

Microsoft rivals Slack with its Teams product, and its stock registered a small decline.

The deal, which is not set in stone, would probably value Slack beyond its $17 billion market capitalization before the report.

Slack saw its revenues jump in Q1 as working from home turned into the new reality during the coronavirus. Overall revenue was $201.7 million, up 50 percent in contrast to the same quarter a year prior.

“Q1 was a phenomenal quarter for Slack,” Co-Founder and CEO Stewart Butterfield said in a past statement, noting 12,000 net new paid clients. “We believe the long-term impact the three months and counting of working from home will have on the way we work is of generational magnitude.”

However, the firm’s stock fell 15 percent in mid-market trading on June 4 and 14 percent at the close on June 5 as the firm acknowledged that the worldwide migration to work at home barley lifted its growth rate prior to COVID-19.

Slack’s Q1 results came two days prior to Zoom Video Communications, the video conference program, registering booming demand. The competitor indicated that its Q1 revenue expanded by 169 percent to $328.2 million from $122 million the past year.

In August, a report surfaced that Salesforce was cutting approximately 1,000 employment positions, or 2 percent of its workforce, even with a massive earnings report that raised the company’s shares.

The firm said it was “reallocating resources to position the company for continued growth,” according to a past published report. “This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities.”

Also, The Dow Jones Industrial Average had unveiled plans to swap out three stocks, including having Salesforce.com take the place of Exxon Mobil Corp., according to news in August.