đź’¬ Slack's surprise acquisition news
Hey Snackers,
As if 2020 wasn't already enough like a "Black Mirror" episode: a mysterious metal monolith was just found in the middle of a Utah desert. Aliens, or Elon?
Stocks surged last week on promising vaccine news and less political uncertainty. The Dow hit 30K for the 1st time on Tuesday, and the S&P 500 notched a record closing high on Friday.
Salesforce cements its B2B strategy with a possible (pricey) Slack-quisition
Set your status back to "Active"... Just before Thanksgiving break, news broke that Salesforce is in advanced talks to buy Slack — according to WSJ's infamous "people familiar with the matter" (#PFWTM). Slack is the office messaging app that rules your life. Salesforce is the cloud software company obsessed with Customer relationship management (CRM). Think: salespeople compulsively logging interactions with leads — "sent 808th cold email to CFO."
- Slack stock soared 39% for the week. The deal would likely value it at more than $17B, making it Salesforce's biggest acquisition. Slack hasn't been doing as well as Zoom in the WFH boom.
- Salesforce stock dipped 4% on the possibility of another pricey acquisition. Over its 21-year history, Salesforce has leapfrogged by buying 60+ companies.
Joining #baby-yoda-memes channel... Salesforce and Slack have two things in common: they're both business-facing subscription cloud companies and they're both Microsoft rivals. Lately, Microsoft has been aggressively expanding its Teams suite, offering Slack-like collaboration features. It also has a cloud CRM competitor called Dynamics.
- Over the years, Salesforce has moved towards becoming an "all-in-one" business software provider, offering services like data analytics.
- This Slack-quisition would give it 130K+ paying Slack customers to further that goal — and gain an edge on Microsoft.
Salesforce is cementing its B2B focus... that's business-to-business. Microsoft has B2B and strong consumer-facing businesses (Microsoft Word, Xbox, LinkedIn). Even legacy B2B tech giant Oracle has been showing interest in consumers with its pending TikTok-quisition. Salesforce tried to buy LinkedIn in 2016 (but lost to Microsoft). Four years later, it's cementing its B2B-only strategy with this potential Slack-quisition.
Who's up...
Can't wait for TwitTok and TikPin... Snap's Stories feature has been copied by nearly every social app. Now Snap's doing some copying of its own with a new "Spotlight" tab for endlessly scrolling viral vertical videos (#ThreeVs). Addictive "Three Vs" content is the secret sauce of TikTok's wild growth. That's why Facebook is aggressively pushing Insta "Reels" — and why Snap is shelling out $1M each day to Spotlight creators. With the scrutiny around viral misinformation, Snap's moving into riskier territory. Still, the stock jumped 4% for the week and has nearly tripled this year.
That's sooo Fitch... Your favorite place to pose with shirtless "models" in 7th grade is having a moment. Abercrombie & Fitch stock soared last week on expectation-beating quarterly earnings. Online sales jumped 43%, and Abercrombie notched a profit thanks to cost-cutting. Interestingly: its Californian sub-brand Hollister brought in 58% of total sales. Hollister got boosted by its sub-sub-brand Gilly Hicks, which makes comfy loungewear and bralettes.
...and who's down
Vax on, vax off... AstraZeneca stock dropped 5% for the week on two pieces of not-so-hot news. First, it announced that its Covid-19 vaccine was 70% effective on average. That sounds solid — until you compare it to Pfizer and Moderna's 95% effectiveness rates. Then, AstraZeneca acknowledged a key mistake in its trials, which made experts question the reliability of its data. Oxford University, which jointly made the vaccine, says more data is needed to determine its efficacy and safety.
Peace, Love... the Gap? Oversized hoodie legend Gap wasn't feeling it last week. Its stock plunged 11% on worse-than-expected quarterly earnings. Gap's Old Navy brand saw strong growth, and its athleisure brand Athleta (unsurprisingly) performed particularly well — sales soared a record 35% on the leggings life. Despite a 61% jump in online sales, Gap's profit missed estimates because it boosted marketing spend last quarter.
What else we’re Snackin’
- Hustle: 50 simple side hustle ideas to earn some extra cash (there's bound to be one).
- Live: How to be more thankful for your life by changing just one word.
- Focus: Why this pandemic winter is the perfect time to try out "slow work."
- Learn: How to make a financial plan — from figuring out your net worth, to saving and investing for your goals.
- Succeed: The dreaded cover letter doesn't have to be dreadful. Here's how to write one that'll get you a job.
- Read: The life advice that Nobel laureate Rudyard Kipling gave his son (in a poem).
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This Week
- Monday: Earnings expected from Zoom
- Tuesday: Earnings expected from Salesforce
- Wednesday: Earnings expected from Snowflake
- Thursday: Weekly jobless claims. Earnings expected from Dollar General, DocuSign, Kroger, and Ulta
- Friday: November unemployment rate is released. Earnings expected from Big Lots
Disclosure: Authors of this Snacks own shares of Slack and Snap
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