Salesforce raises $500 million; Time to go shopping?

Salesforce raises $500 million; Time to go shopping?

Summary: Salesforce.com doesn't need the cash, but said it would float a $500 million convertible bond offering.

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Salesforce.com doesn't need the cash, but on Monday said it would float a $500 million convertible bond offering.

The convertible bonds are due in 2015 and Salesforce.com will enter hedge transactions to minimize future dilution on shareholders.

Now Salesforce.com may just be taking advantage of low rates, but whenever a company with cash floats debt the natural question is: What for?

The official line (statement): Salesforce.com will use the proceeds for "general corporate purposes, including funding possible investments in, or acquisitions of, complementary businesses, joint ventures, services or technologies, working capital and capital expenditures."

The unofficial line: Expect Salesforce.com to go shopping. As of Oct. 31, Salesforce.com had $1.07 billion in total cash and marketable securities.

Topic: Enterprise Software

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8 comments
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  • Salesforce is Orwellian business

    and danger to our freedom.
    whitenight2010
    • Orwellian...

      Let me guess, everybody but Linux is "Orwellian", huh?

      That's an odd word, and I've seen it about 10 times in the last week in comments on ZDNet, most of the time referring to Microsoft.

      At least you've found a non-traditional target. Good for you!
      rshores
      • Google, FICO, Salesforce = Orwellian

        cause they spy on people and collect your personal information! so they are orwellian!
        whitenight2010
  • RE: Salesforce raises $500 million; Time to go shopping?

    Salesforce has been tightening budgets and isn't spending cash internally. Graham Smith has been reigning in spending and running it like a business. The Marketng juggernaut hasn't slowed down and will continue to burn through cash. Marc has had a standing sell order every day since the company went public and the insiders are coninuing to sell. There is no one internal at Salesforce buying the stock and they won't. The company is struggling with their growth, internal operations are less than efficient and the origianl culture is gone. The DNA is moving out of the company and the overall pressure on the business is growing. The Instranet, Koral and Sendia company purchases have served the company well and Marc continues to look into his appexchange incubator for purchases. There is a reason they went to the market for Cash and I believe it is to shore up operations, backstop marketing and sales spend and potentially expand M&A activity. None the less, Salesforce needs the money to grow and doesn't have enought in the bank today to do what they want.
    emegazzini
  • RE: Salesforce raises $500 million; Time to go shopping?

    I'm sitting here watching a salesforce timesheet save. I've been doing so for 15 minutes and expect it to eventually fail completely.

    I suppose I write cloud software, this salesforce timesheet interface is beyond bad. I could create a better product in a day.

    I hope they buy some competence.
    Tsingi
  • RE: Salesforce raises $500 million; Time to go shopping?

    SF is not very intuitive to use from my point of view. SF solved some business problems but there are so much more to do
    JoyJiayiWang
  • RE: Salesforce raises $500 million; Time to go shopping?

    SF isn't very intuitive to use from my own experience, still a long way to go. I wonder if salesforce has competitor in this field at all?
    JoyJiayiWang
  • RE: Salesforce raises $500 million; Time to go shopping?

    bldgqy,good post!
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