Sales bro struggles
Pipeline panic at Salesforce
Good morning, database defenders. This is your Stock Market Rundown for June 3rd, 2024. Thanks for tuning in for another week of speculative satire. Let’s get started:
TODAY’S TOP STORY: BENIOFF’S GROWTH GRIND
Salesforce is the top-selling platform for sales bros to organize their pipeline and close deals. Maybe its success wasn’t too surprising, given that founder and CEO Marc Benioff earned his software chops working at Oracle for thirteen years.
He was youngest vice-president in Oracle’s history, but bailed to launch Salesforce. (According to legend, Benioff came up with the idea for Salesforce while swimming with dolphins.)
As chief exec, Benioff basically invented the concept of “software as a service” (SaaS), and led Salesforce to a $227 billion market cap. It’s now the biggest employer in San Francisco.
But lately, there’s trouble in SaaS-land. Last week, Salesforce’s stock suffered its biggest one-day drop in 20 years after management projected Q2 revenue below analyst estimates. Salesforce’s growth rate has slowed to single digits—way more sluggish than its usual double-digit clip.
Salesforce puking shouldn’t really have been too much of a shocker: B2B software stocks have been whiffing on expectations this entire earning season. The problem: SaaS products are priced by seat. And many tech titans massively overhired during the early 2020s boom. If you could fog a mirror, you got a job.
Now reality has set in, and big tech is paring back their workforces. That makes it tough for SaaS businesses to grow. If you’re laying off the B players on your sales team, you’re not gonna need many new Salesforce licenses.
Most analysts think Salesforce’s current woes are an overreaction, and some are even issuing buy ratings on this weakness. Only time will tell whether Salesforce will emerge from underwater, or Benioff will be stuck swimming with the fishes.
SO WHAT ELSE IS GOING ON?
McDonald’s is under fire due to reports of an enterprising franchisee charging $18 for a Big Mac. Does it come topped with foie gras and a white truffle sauce?
You might remember I previously looped you in on Disney’s boardroom battle with Nelson Peltz. Quick update: with Peltz losing the proxy showdown, he isn’t sticking around—he’s sold his entire stake in Disney. Knowing how to move on in life? So important.
Your local moving truck driver can look forward to a summer of lounging by the pool with a Miller Lite in hand, because work is gonna be slow. Contract signing for US home purchases have hit a three-year low due to rising rates hurting affordability.
The SEC is continuing to pick on Elon Musk, forcing the Tesla CEO to testify into a probe of his acquisition of Twitter. What’s next—are they going to break his glasses and steal his lunch money?
That’s it for today, my friends; catch you back here at the usual time tomorrow morning. Yours in capitalism, The Axe
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