Frighteningly, Salesforce’s (CRM) co-founder and co-CEO, Marc Benioff, is selling large blocks of the company’s stock almost each day.
Benioff has been selling 15,000 shares of Salesforce (CRM) each day since July, Bloomberg claims. Hence, I calculate Benioff made around $3.858 million a day selling stock. If Salesforce’s share price matched the $257.21 Mr. Market paid for it on 14 December 2023.
Benioff accumulated $475 million in cash by selling CRM between July 2023 and 13 December 2023, Bloomberg estimates. Thus, a billionaire is accumulating an enormous pile of cash.
Why is Benioff selling Salesforce (CRM)?
Investors will wonder why Benioff is selling his company’s shares. Cynics will wonder if Benioff knows about Salesforce (CRM) outsiders don’t. Perhaps problems at the company.
The paranoid will wonder if Benioff expects a depression or recession and wants an enormous pile of cash to survive or buy cheap investments. Benioff is not the only billionaire selling stock.
Warren Buffett’s Berkshire Hathaway (BRK.A) sold $21.3 billion worth of stock in the first two quarters of 2023, Yahoo! Finance reports. Buffett told investors that American economic growth is slowing. Hence, Uncle Warren thinks many investments will be less profitable.
However, Benioff claims he is liquidating stock so he can increase his philanthropy. Yet Benioff’s cash pile will drive the conversation about income inequality.
To explain, such cash piles allow the rich to thrive economic downturns. In particular, the wealthy can buy assets cheap and get richer. For example, Buffett bought the Burlington Northern Santa Fe (BNSF) railroad during the 2008 economic meltdown.
Is Salesforce (CRM) making money?
Benioff’s stock liquidation is confusing because Salesforce (CRM) is thriving. For example, Salesforce’s revenues grew by 11.27% in the quarter ending on 31 October 2023.
Salesforce’s quarterly revenues rose from $7.837 billion on 31 October 2022 to $8.72 billion on Halloween 2023. Similarly, the quarterly gross profit grew from $5.25 billion on 31 October 2022 to $5.860 billion on 31 October 2023. Plus, the quarterly operating income grew from $460 million on 31 October 2022 to $1.501 billion on 31 October 2023.
Impressively, Salesforce’s quarterly operating cash flow grew from $313 million on 31 October 2022 to $1.532 billion on 31 October 2023. However, the quarterly ending cash flow was -$319 million on 31 October 2023.
How Much Cash Does Salesforce (CRM) Generate?
Yet Salesforce can generate enormous amounts of cash. It reported a $9.155 billion quarterly ending cash flow on 31 December 2022. There was also a $4.491 billion quarterly operating cash flow on the same day.
Salesforce had $11.863 billion cash and short-term investments on 31 October 2023. The cash and short-term investments fell from $11.918 billion on 31 October 2022 and $13.977 billion on 31 December 2022.
In contrast, Salesforce had $13.759 billion in total debt on 31 October 2023. The total debt fell from $14.644 billion on 31 October 2022.
Hence, Salesforce has less cash and more debt. It also has less value. The Total assets fell from $91.844 billion on 31 October 2022 to $91.022 billion on 31 October 2023.
Consequently, I consider Salesforce overpriced at $257.21 a share. However, it is still an attractive stock.
What Value Does Salesforce (CRM) Offer?
Salesforce (CRM) claims to be the number one provider of customer resource management software with 21.9% of the market.
It claimed to have over 150,000 customers worldwide. Notable Salesforce customers include General Mills, Santander, Uber Eats (UBER), and Spotify (SPOT).
Salesforce is developing new markets. For example, Salesforce is integrating its Service Cloud with Apple Messages for Business, 9to5 Mac reports. This could allow users to access Service Cloud through their iPhones.
Salesforce has had a strategic partnership with Apple (AAPL) since 2018. Salesforce will start using Apple’s Augmented Reality (AR) technology in Summer 2024, 9to5 Mac predicts. They hope to add Apple AR capabilities to the Salesforce Field Service Mobile App.
Plus a Salesforce Field Service iOS widget could give field service technicians a quick view of account information on an iPhone’s home screen. They claim the Salesforce Field Service iOS widget will appear in summer 2024.
In the final analysis, I think Salesforce (CRM) is still a decent stock. However, Benioff’s stock sales should concern investors.
*https://finance.yahoo.com/news/warren-buffett-sells-8-billion-190940745.html
*https://www.gobankingrates.com/money/economy/warren-buffetts-advice-to-investors-incredible-period-for-americas-economy-is-ending/?hyperlink_type=manual&utm_term=related_link_1&utm_campaign=1252343&utm_source=yahoo.com&utm_content=3&utm_medium=rss
*https://www.salesforce.com/campaign/worlds-number-one-crm/
*https://9to5mac.com/2023/12/13/salesforce-apple-business-chat-arkit-widget/
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