Why Salesforce Shares Are Down Today

It is reported that the cloud-based customer relationship management (CRM) system, which is a new type of cloud computing technology, has been used for the development of a new customer relationship management system.CRMPlatform providers are in the process of acquiring data management software companies.Informatica (NYSE. INFAThe negotiation of the latter paragraph.Salesforce (NYSE. CRM) shares were down 7.31 TP3T on Monday. shares of Informatica were also down about 6.51 TP3T today.

Why are investors upset about Salesforce's potential acquisition of Informatica?

Over the weekend, a source in theThe Wall Street JournalSalesforce is in "advanced talks" to acquire Informatica, which this morning had a market capitalization of just under $11 billion, making it one of Salesforce's biggest deals - though still well below the nearly $28 billion it paid for Slack Technologies three years ago, the company said. Informatica's market capitalization this morning is just under $11 billion, making it one of Salesforce's biggest deals - though still well below the nearly $28 billion it paid for Slack Technologies three years ago. Salesforce had just over $14 billion in cash on hand at the end of the most recent quarter, making it possible to fully fund the deal without diluting existing shareholders.

However, Salesforce's acquisition drive (it has acquired more than 70 companies since 2006) has attracted a number of activist investors in recent quarters, who have called on Salesforce to shift its focus to cutting costs and improving margins, while maximizing organic growth and improving its return on capital through share repurchases. Just last month, Salesforce even disbanded a committee focused on acquisitions to appease these activist investors.

What's next for Salesforce investors?

Of course, there's no word on whether Salesforce and Informatica will reach a formal agreement. But news of the potential acquisition has raised fears of another proxy fight by activist investors. If this means Salesforce is shifting its focus away from concentrating on its existing business as it undertakes yet another major business overhaul, it's no wonder that some weary investors are selling their shares today.

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Steve Symington does not own any of the stocks listed above.The Motley Fool holds a recommendation for Salesforce.The Motley Fool has a disclosure policy.

Why Salesforce Stock Is Down Today was originally published by The Motley Fool.