Stifel says Salesforce for Slack at $20B would be 'expensive,' but 'digestible'

Stifel analyst Tom Roderick said, in commenting on the Wall Street Journal report that Salesforce.com (CRM) has been in talks to potentially acquire Slack (WORK) at a value that is likely above its current capitalization of $17B, that his experience suggests "when the WSJ reports on 'people familiar with the situation,' you can feel reasonably comfortable that the report is well beyond pure chatter and innuendo." At a theoretical price of $20B, Slack "would be expensive, and near-term dilutive to margins, but digestible" for Salesforce, said Roderick, who thinks a "Collaboration Cloud" would present Salesforce with "yet another massive horizontal" market to address. While acknowledging he has "no knowledge of the proceedings here" and is "merely offering an outside opinion," the analyst added that Zoom (ZM) would be the "obvious candidate" he thinks of when wondering who else could be a potential buyer and "could defend itself more effectively against the Microsoft Teams approach" if it owned a collaboration platform like Slack. Roderick keeps a Buy rating and $295 price target on Salesforce shares, which are down nearly 5% to $249.21 in late day trading.