In a twist that even a daytime soap opera would envy, Salesforce has recently bid adieu to some of its top dogs, and Wall Street isn’t exactly throwing a celebration party.
First in the exit queue was Stewart Butterfield, the CEO of Slack, who, just last year, became a part of Salesforce’s grandest acquisition ever. Then, to add more drama, Bret Taylor, co-CEO of Salesforce and the mastermind behind the Slack deal, announced his departure on the one-year anniversary of his promotion to the top spot, sharing the throne with Marc Benioff.
Imagine Wall Street as a busy beehive, and over the past three trading days, it’s been buzzing with anxiety. The stock market’s rollercoaster ride featured two of Salesforce’s gloomiest days this year, with a nosedive of 8.3% and 7.4%, respectively. To put salt in the wound, while Nasdaq was dealing with a mere 28% decline, Salesforce was a standout loser with a whopping 47% plunge in its stock value for the year. In simpler terms, it’s like Salesforce grabbed the front seat on the market’s most unfriendly rollercoaster.
Now, what’s the story behind these dramatic exits, you ask? Well, Taylor decided he’s had enough and wants to return to his roots as an entrepreneur. Benioff, while trying to put on a brave face, admitted he’s not exactly thrilled about this sudden twist in the plot. It’s like the plot of a sitcom – the main character’s leaving, and the supporting cast is in utter disbelief!
Butterfield, on the other hand, chose a different direction, making it clear he’s not looking for entrepreneurial escapades. In a Slack message that got its five seconds of fame on CNBC, Butterfield spilled the beans, saying he’s going to spend more time with his family (alongside working on personal projects, getting healthy, and all those things that are a bit tricky when you’re running a company the size of a small country).
Wait, there’s more! The exodus from Salesforce’s top ranks is turning into a trend. Gavin Patterson, the mastermind behind strategy, is set to leave in January, and Mark Nelson, the brain behind Salesforce’s Tableau product, just waved goodbye. But it’s not just Salesforce getting a dose of the drama; Slack is also feeling the pinch. Tamar Yehoshua, the product guru, and Jonathan Prince, the marketing maestro, are also taking their exit cues. Talk about a mass exodus!
So, what’s the deal with Slack? It seems like it was the pandemic cupid that brought Salesforce and Slack together. With remote work becoming the norm, Slack’s chat app became the star of the show. The surge in team creations and new paid customers was like a plot twist that even the writers didn’t see coming. It’s like the showrunners decided to skip ahead by 18 months in a single episode!
Salesforce saw this potential and went all in, shelling out a jaw-dropping $27 billion for Slack. Taylor, the conductor of this deal symphony, was so into it that his name was practically written all over it. And guess what? It all ended with a grand finale on December 1st, 2020, according to a fancy filing with the SEC.
But, hold your horses! Since that glorious peak in July 2021, where Salesforce’s stock was strutting its stuff at almost $310, it’s been a wild downward spiral. Think of it as the stock market version of a rollercoaster that suddenly lost its brakes and is now on a freefall. Ouch!
Now, let’s talk business, or at least try. Salesforce, like the high school kid struggling to keep up with the cool crowd, has been hit hard by inflation and rising interest rates this year. Investors are now flocking to safer corners of the market, leaving Salesforce to fend for itself. And guess what? Salesforce’s recent report card didn’t help the situation. Their revenue growth in the third quarter was 14%, which might sound decent, but it’s like the slowest growth spurt since the company’s debut in 2004. And their forecast for the fourth quarter? It’s like predicting the weather – 8% to 10% growth. Not exactly a sunny outlook!
Now, analysts are the critics of this financial theater, and they have their own takes. Guggenheim’s analysts saw two elephants making themselves comfy in the room. First, the company didn’t give any hints about its plans for the next fiscal year. It’s like ending a movie with a cliffhanger and not telling anyone when the sequel is dropping.
But wait, there’s more speculation! Why did Bret Taylor decide to bail out of his high-profile co-CEO gig after just a year? The Guggenheim analysts, with their detective hats on, reminded everyone about Keith Block’s similar vanishing act three years ago, and they concluded that maybe the company’s been having a tough time since then. Talk about a mystery plot!
As the final act in this financial drama, Wolfe Research stepped in and decided to change the rating on Salesforce’s stock from “Buy” to “Hold.” They basically said that Salesforce is like a character stepping into a new, tough chapter after a series of blunders, top-level departures, and a revenue growth slowdown. It’s like the hero facing an unexpected plot twist!
In a nutshell, Salesforce is like a character in a sitcom facing some major plot twists and turns. The stock market is the stage, and investors are the audience, watching in a mix of excitement, anxiety, and perhaps a dash of popcorn. Just like in the best shows, we can’t predict how it’ll all play out, but one thing’s for sure – this season of Salesforce’s financial drama is one for the books! 🎬📈