“We pressed the hyperspace button”

Salesforce co-founder and CEO Marc Benioff just tossed an already hot potato back to five hungry activist investors.

The tech titan outperformed Wall Street’s earnings estimates and delivered a surprisingly strong full-year earnings outlook after Wednesday’s close, Yahoo Finance’s Ellie Garfinkle said. The company also unveiled a new $20 billion share buyback plan and told earnings investors that it had “disbanded” its internal M&A committee, a major signal to investors demanding cost cuts.

Stocks rose 16% after hours, and the ticker page Salesforce soared up the list of most visited on the Yahoo Finance platform.

“We’ve hit the hyperspace button,” Benioff told Yahoo Finance, referring to initiatives to speed things up and increase profitability.

The flurry of seemingly positive earnings and loss news runs counter to the exit announcements of activist investors and top executives that have been hitting Salesforce in recent months.

Co-CEO Bret Taylor is no longer co-CEO of Salesforce — instead, he is looking to launch an AI startup, the serial entrepreneur told Yahoo Finance. Slack founder Stuart Butterfield, who stayed when the company was acquired by Salesforce, is still a founder, but no longer with the parent company.

The company is also eyeing five activist money management sharks: Elliott Management, Starboard Value, Inclusive Capital, ValueAct and Third Point.

[Read More: Salesforce’s activist investors: Who are they, and what do they want?]

Yahoo Finance chats with Salesforce CEO Marc Benioff at Dreamforce 2022.

Yahoo Finance chats with Salesforce CEO Marc Benioff at Dreamforce 2022.

This is an unprecedented battle between activists and public companies, Yahoo Finance professionals said. Sources told Yahoo Finance that the activist group is demanding much higher profits, an end to takeovers and a Benioff succession plan as CEO.

A source familiar with Elliott’s thoughts says Yahoo Finance’s talks with Salesforce were “tense” and no settlement was reached. According to the source, Elliott plans to appoint several people to the board of Salesforce and would like to further reduce costs.

“Today’s announcements by Salesforce represent progress towards restoring investor confidence. Accelerating margin targets, committing to responsible capital return priorities, establishing a business transformation committee, and dissolving the M&A committee are necessary steps forward. These steps are in line with our recommendation and we believe they will help restore the value of Salesforce,” Elliott said in a statement late Wednesday night.

It’s unclear if new Salesforce offerings to activists, such as an increased buyback plan, touting new cost-cutting efforts through collaboration with Bain, a 27% operating margin promise in 2023 (and 30% by Q1 2024) will return to mergers and acquisitions – will satisfy the group.

Benioff did not indicate whether a decision is close with the activists. However, Elliott’s statement suggests that more work needs to be done.

Benioff added that there are likely to be no major acquisitions for the foreseeable future.

“Shareholders are now part of Ohana with significant growth+profitability potential,” said Citi analyst Tyler Radke.

Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and beyond LinkedIn.

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