CRM share price decline

Investment Analysis Clubs Saul’s Investing Discussions
1

I suspect today’s decline of between $3 and $4 per share is due to the rumor that CRM might buy Twitter.

I can’t seem to find any other reason for the decline.

Does anyone on this board have other ideas as to why the decline?

Also, given the big decline, is anyone on this board considering it a good time to add to their position? I"m considering it myself, but not sure what impact a purchase of TWTR by CRM would have long-term.

2

Does anyone on this board have other ideas as to why the decline?

The tide


Dow Jones Industrial Average   Down 131.01   Down 0.71%
S&P 500                        Down  12.49   Down 0.57%
NASDAQ Composite               Down  33.78   Down 0.63%

Denny Schlesinger

3

Thanks Denny

CRM was down about 5.63% at the time the DJIA was down only about 60 points or so, so while the down markets may have been part of it, it seems to me the decline in CRM’s share price was disproportionately large in comparison.

1 Like
4

Indexes are averages so they are less volatile than individual stocks. I’m finding the market exceedingly “disorganized,” too much whiplash.

Denny Schlesinger

5

It’s the Twitter thing, no doubt. More broadly, it’s concern that the CRM CEO wants to buy stuff, even if he doesn’t have the cash. Do a little googling and you’ll find the stories.

6

Sounds like the Twitter thing…

http://247wallst.com/investing/2016/09/25/salesforce-com-sto…

Twitter (NYSE: TWTR) may or may not be for sale. salesforce.com (NYSE: CRM) may or may not be the buyer. If salesforce.com does make an offer for Twitter at slightly above the current price of $23 (which surged over 20%) on the rumor, its shares could drop 25% from $70 to $52, which is close to their 52-week low

The simplistic view of the drop is that saleforce.com’s market cap is $48 billion. Twitter’s is $16 billion. Dilution. salesforce.com only has $1.5 billion in cash and securities on its balance sheet, so it would have to use stock, or borrow an extraordinary amount to money

In addition to the price, salesforce.com would have a very hard time justifying how Twitter would help its core businesses

Microsoft bought LinkedIn, they are rumored to like it also.

7

I am not sure how it quite fits in with CRM either but maybe it is time I setup an account and look what this Twiter thing is all about

8

What goes up must come down, especially when billionaires are short what’s up.