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Salesforce could more than double its valuation after $27.7 billion deal for Slack, Jim Cramer says


Salesforce‘s blockbuster deal for the Slack messaging platform will give the software program big the visibility it wants to extend its valuation by threefold, CNBC’s Jim Cramer mentioned Thursday.

“If you follow the customer, you’ll understand why Salesforce.com, which built a gigantic business by helping clients harness the power of the cloud, decided to shell out $27.7 billion for Slack Technologies in a deal that was extensively criticized,” the “Mad Money” host mentioned. “I think it was a brilliant move, though.”

Salesforce introduced it was buying Slack, its largest acquisition thus far, after Tuesday’s shut. The inventory is down about 20 factors for the reason that deal was publicized.

Salesforce shares closed Thursday’s session at $220.97, giving the corporate a $171.5 billion market cap. The deal will give each firms more leverage to compete with Microsoft — Slack with Microsoft Teams and Salesforce, which sells enterprise buyer relationship administration software program, with Microsoft’s software program division.

Salesforce, which was added to the 30-stock Dow Jones Industrial Average this summer time, peaked at $284.50 in early September, days after it joined the blue-chip index.

Cramer mentioned the tie-up offers Slack monetary sources to go face to face with Teams, including that the corporate suits in Salesforce’s cloud suite.

“Salesforce.com has grown to be a $200 billion Dow Jones colossus under the leadership of Marc Benioff,” Cramer mentioned. “But thanks to the law of large numbers … it’s very difficult for Marc to go from $200 billion to the $500 billion that I think that company can go, at least not organically.”

“Because to most people, Salesforce is invisible,” he continued. “Unless you’re a data scientist or you work in sales, you don’t interact with their software. That’s why Marc needs a visible platform, something everyone can see and something everyone can buy.”

Disclosure: Cramer’s charitable belief owns shares of Salesforce.com.

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