February 09, 2008
Salesforce/Oracle Deal?
Silicon Valley Watcher's Tom Foremski is reporting that a reliable source tells him Salesforce.com has approached Oracle about a potential sale.
If you've had your fill of Microsoft/Yahoo news this week, read Tom's complete analysis.
More coverage:
TechCrunch: Salesforce Shopping Itself To Oracle For $75/Share
ZDNet: Salesforce pitching to Oracle at $75 a share
deal architect: salesforce.com in play?
February 9, 2008 in news | Permalink
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Comments
Ha ha ha ha ha ha ha! There are some empty cubes over at Oracle for you next to the ex-Siebel people you despise! I'm sure Marc will mail you a postcard from Hawaii that you can post on your cube. Aloha!
Posted by: Tom Siebel | Feb 11, 2008 6:02:50 PM
I like how the follow up articles are reporting it as fact.
$75 is waaaay to low a price, which is why it seeme unbelievable to these ears. This company is easily worth $150-$200 a share within 3 years, especially if the platform takes off.
Posted by: jdubbs29 | Feb 12, 2008 10:51:04 AM
Are you crazy? $75/share vs. a pre-rumor price of about $50 leaves you with a healthy 50% premium to market -- with "market" currently including a ridiculous P/E of 600+. For comparison, MSFT's initial offer for YHOO was a 62% premium; YHOO is about 25x more profitable than CRM and has a much broader portfolio of growth opportunities.
Assuming continued lackluster profitability for CRM, $175/share would leave you with a P/E for CRM of 1500+ -- totally absurd. GOOG's P/E is 40. AAPL's P/E is 28. ORCL's P/E is 22. Hard to argue the magical "platform" premium isn't already built into CRM at a P/E of 606; they've been talking about platforms since they went public in 2004.
Were Larry to make an offer, he would likely do what he did to PSFT: make a very low bid, use 2 years of FUD to beat down the competition, and then acquire at a reasonable price.
I remember all the SEBL folks were sure there was NO WAY Tom S would ever sell out to Larry. Well, money talks... Rumor has it Tom turned down a bid from MSFT at $30/share in 2003. He sold to Larry 2 years later for $10.66. Whoops.
Learn from history! Take the money (if it appears) and run.
Posted by: Roscoe | Feb 12, 2008 12:36:51 PM
