Salesforce.com Continues to Acquire Cloud Companies to Keep Institutional Investors Happy
Salesforce.com (NYSE:CRM) recently announced plans to acquire Rypple, a cloud-based social performance management company. Marc Benioff, Salesforce’s CEO, said “The next generation of HCM is not just about a cloud delivery mode, it’s about a fundamentally better way to recruit, manage and empower employees in a social world.” Beioff is putting his money where his mouth is.
Over the past year, Salesforce’s stock has traded in a range of $94.09 to $160.12, and most recently traded at $100.29 near the lower end.
However, according to SEC data, a number of institutional investors are still bullish on the company. Morgan Stanley acquired 3,729,809 shares, worth $426,242,573, in the third quarter. RCM Capital Management acquired 2,212,796 shares, worth $252,878,327 in the third quarter. Artisan Partners acquired1,677,942 shares, worth $191,755,212 in the third quarter. Those are significant bets on the cloud computing play.
Cloud computing has become one of the hottest areas for investing. However, some of the best pure plays are still private companies. Thus, Salesforce (NYSE:CRM) has become somewhat of a poster child for public companies aggressively growing their cloud computing businesses. For that reason alone, expect Salesforce to make more acquisitions like Rypple in 2012, and more large institutional investors to allocate a portion of their portfolio to Salesforce as a cloud stock.
Competitors to Watch: Microsoft Corporation (NASDAQ:MSFT), Google Inc. (NASDAQ:GOOG), Oracle Corporation (NASDAQ:ORCL), Servicesource Intl. Inc (NASDAQ:SREV), SAP AG (NYSE:SAP), NetSuite Inc. (NYSE:N), Intl. Business Machines Corp. (NYSE:IBM), Pegasystems Inc. (NASDAQ:PEGA), LivePerson, Inc. (NASDAQ:LPSN), and Constant Contact, Inc. (NASDAQ:CTCT).