Salesforce CEO Marc Benioff made a few comments during Wednesday’s investor meeting that indicated he’s likely not going to pursue a Twitter acquisition — leading to a 4% jump in Salesforce stock on Thursday.
Benioff didn’t explicitly mention Twitter, instead calling it a “company that shall not be named,” and he didn’t give a clear answer around a possible deal. But most analysts now believe a Salesforce-Twitter tie up is highly unlikely.
“While Benioff did not give a yes or no response around a Twitter acquisition, we come away thinking a deal is not likely to happen,” Cowen & Co. analyst Derrick Wood wrote in a note Thursday.
Wood highlighted the following Benioff comments to explain why:
- “We only do things that are in the interest of shareholders” — Shows Benioff listens to what the financial analysts say, and almost all analysts are against the deal
- “I don’t believe in doing things as a lone wolf” — Shows he won’t do a deal unless everybody’s on board
- “We look at a lot of things and pass on almost everything” — Twitter’s likely one of the companies Salesforce will pass on
- “I had more than 200 one-on-one customer meetings at Dreamforce and not a single customer asked me about Twitter” — Suggests customers are not asking for a Twitter acquisition
- “I wish Jack very well” — Benioff couldn’t resist and finally made a comment that shows he’s talking about Twitter
In addition, Benioff made some comments hinting that he’s not interested in Twitter’s data, saying Salesforce already has enough data to pursue its product strategy, including development of its new artificial intelligence product Einstein. He also described previous companies he placed a bid on, like LinkedIn, or acquired, like Demandware, “marquee monopolistic brands,” while calling Twitter just an “unpolished jewel.”
Salesforce investors are clearly relieved by the news. Earlier this week, Salesforce’s stock plunged by more than 7% when it looked like Salesforce was preparing to buy Twitter, an expensive deal that would come on top of Benioff’s $4 billion acquisition spree this year.
“While Benioff did not explicitly refute the idea that Salesforce could bid on Twitter, we believe a number of the points that he made would seem to indicate that the chances of deal happening are fairly low,” Evercore’s Kirk Materne wrote in a note.
Salesforce, Google, and a number of other tech companies like Apple, have been rumoured to be interested in buying Twitter over the past couple weeks. But after it was reported Google and Apple have backed out of a deal, and following Benioff’s comments, Twitter stock has dropped 20% as of Thursday afternoon.
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