Why the loose stock jumped and why the Salesforce stock fell today

What happened

Business software giant salesforce.com (NYSE: CRM) allegedly considering the purchase of business collaboration tools Slack Technologies (NYSE: WORK). The report sparked dramatic market reactions for both stocks, with Slack shares up 32.5% while Salesforce shares fell 5.2%.

So what

According to a widely quoted report A Wall Street Journal, Salesforce has been talking to Slack about a business combination in recent weeks. There is no definite proposal on the table yet, but the WSJAccording to anonymous insider sources, the final price tag on Wednesday morning will exceed Slack’s $ 17 billion market capitalization. Negotiations should not result in the deal and divert Salesforce’s attention to other buyout purposes, some sources say.

Close-up shot of hands as two businessmen shake hands

Image source: Getty Images.

Now what

Salesforce is no stranger to large acquisitions. The company spent $ 1.35 billion on hiring a ClickSoftware field services specialist in 2019, a few days after it completed the $ 15.3 billion buyout of data analysis expert Tableau. Nevertheless, Slack will be the largest business in the history of Salesforce. A buyout of this magnitude should not be taken lightly, and Salesforce investors do not seem to have been terribly impressed by this idea. Slack’s market cap grew by $ 3.7 billion today, while Salesforce’s market value fell by $ 7 billion.