Friday, May 01, 2015

Salesforce’s slow growth may prompt hunt for buyer [Reuters]

More Salesforce sale speculation; also see Oracle co-CEO Safra Catz stifles Salesforce acquisition rumor (SFGate)

"Yet the company’s professed valuation of more than 100 times estimated adjusted earnings for this year looks like a stretch. According to standard accounting principles, Salesforce is bleeding red ink, losing $263 million in 2014 alone. Investors nonetheless seem to have plenty of faith in its ability to grow and eventually rack up a huge profit. The problem is that analysts expect growth to slow to a rate of 21 percent this year, about half the rate of several years ago.

To some degree, that’s a natural result of getting larger. But investors will soon want to see the company start making money, and that’s a lot harder to pull off than revenue growth.

Benioff may be thinking that a sale is a better option. He has already peddled more than $800,000 worth of shares on almost every trading day over the past few months, and a chunky premium could tempt him to get out altogether."
Salesforce’s slow growth may prompt hunt for buyer

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