Salesforce Inc (CRM)

Salesforce Inc (CRM) stock fell by 7.28% as reports emerged regarding its late-stage talks to acquire data-management software company Informatica. The potential acquisition raised concerns among investors, leading to a sell-off of Salesforce shares.

• Reason for Stock Decline: The news of Salesforce's potential acquisition of Informatica caused its stock to drop by 7.3% on Monday. While Informatica's market capitalization is just below $11 billion, the deal would still be one of Salesforce's largest, though significantly lower than the nearly $28 billion it paid to acquire Slack Technologies three years ago.
• Investor Concerns: Salesforce's history of acquisitions, with over 70 companies purchased since 2006, has led to concerns among activist investors. These investors have been urging Salesforce to focus more on cutting costs and boosting profits, while also maximizing organic growth and increasing capital returns through share buybacks. Salesforce's recent disbandment of a committee focused on mergers and acquisitions was seen as an attempt to address these concerns.
• Potential Impact on Salesforce: While there are no guarantees that Salesforce and Informatica will reach a formal agreement, the news of the potential acquisition has raised fears of renewed proxy battles from activist investors. Some investors are concerned that this acquisition could divert Salesforce's attention away from its existing operations, leading to integration challenges and potentially affecting its financial performance.