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salesforce.com, inc. Message Board

  • climbwitharope climbwitharope Feb 25, 2012 8:17 AM Flag

    Crooked analysts

    Many of the analysts are in on this scam. Anyone with a brain should know that price targets of anywhere between 150 and 225 is pure deceit.

    Let's face it, in a year from now the best scenario is that this company will have revenues of 3 billion, losing half a dollar per share. With 136 Million shares outstanding that is a full year loss of 70 million.

    It already has market cap of 20 billion, which is unprecedented high for a stock with revenues under 3 billion. It is provably the most overvalued large cap stock on Wall Street. How can I prove that? Well, just name me one stock with revenues less than 3 billion that has a market cap more than 15 billion. There is none! The only one is Salesforce.com.

    So a price target of anywhere between 150 and 225, would add another 1 to 10 billion to the already inflated market cap. Deutsche Bank knows very well that a stock with 3 billion revenues (and losing money) is never worth 30 billion. These analysts are deliberately lying in order to pump up the stock price. They are doing this for their Wall Street partners, not for the retail investor.

    You can also see that they are lying by consistently quoting a forward PE of 60 to 100, while they know full well there is no such PE. This forward PE of 68 is even quoted on Yahoo Finance (under Key Statistics). But it is a LIE!

    That PE is based on NON GAAP Earnings, but the trailing PE will always be based on true GAAP earnings, which will be negative this year. You see, a year ago the forward PE was also 60. So how can we have a trailing PE of 9000 now? Because it is based on true earnings (GAAP). True earnings have just become losses. So in from now, you will see a PE that is not 68 but Non Applicable N/A.

    Investing in this scam is a bet that the suckers will fall for this deceit a little longer. A bet that the bubble can hold still more air before it bursts. A bet against sanity. Like swimming to the other side of a river full of crocodiles. Like skiing on a slope with the highest avalanche alert. You know the avalanche will come, but you bet it won't be while you are on the mountain. It has nothing to do with rationally estimating value for your hard earned money.

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    • Their 'goodwill' balance sheet item is rising at least....lol, too bad net tangible assets is going down.

    • I agree with your statements, but there is one flaw in this thinking.

      Multiple funds own this stock and multiple analysts are Rah Rahing this stock. Now analysts are a dime a dozen and many of them are worthless. People should be noting the analysts that are praising this stock at this time. Once a "Rah Rah" analyst, always a "Rah Rah" analyst.
      What I don't get is the institutions. Unless the big institutional funds are colluding, it would seem obvious to me that one or two of them would have started selling by now. I do believe this stock is going to drop significantly, but my only hesitation is why has it come this far. When you look back at the Qualcomm's, AOL's, etc. One knows that this CRM can go further, but don't people ever learn?
      Three cases are possible:
      1) Collusion
      2) A lot of stupid people thinking this stock price is reasonable. Can't believe ANYBODY would buy this stock at this point.
      (Both 1 and 2 can be occurring)
      3) A lot of stupid people do not see the true value of this stock.

      So in the case that I am stupid, if someone could enlighten me as to what I am missing.... I so would appreciate it.

    • Return of bubble age

    • Who cares about the analysts? They only matter on a very short term basis.
      The real analysts work at the big mutual or hedge funds. The asset managers are not throwing money at every stock.
      They have their reasons for buying Salesforce.com, just as I do mine. They are buying huge potential on this stock. They will move the stock not the analysts comments that we read.

      Why not just buy those low PE stocks you like and forget about shorting CRM. That strategy works far better than trying to short high PE stocks.

      Maybe..just maybe, the big funds know a lot more than you or me.

    • On top of that, nothing has really changed at the company, and certainly not for the better. Revenues may have risen a little more than expected, but the company is now losing money per share for the first time. And worse, these losses are forecasted to grow significantly. To more than 50 cents per share for the full year. There was a lot of euphoria over the seemingly grown amount of deferred revenue and big transactions, but as Paulo Santos has pointed out in this article and this article, this was only due to new accounting shenanigans. In reality deferred revenue decelerated instead of accelerated. It is all a matter of make believe. Meanwhile the company is enjoying an utter state of denial by its followers. If the company had reported 625 million revenue, exactly in line with estimates, the stock would probably have tanked 10 %. What a difference 7 million dollar can make. Four billion to be exact.

      Then there is the legitimate remaining question when and how the company will start making money, if ever. This question was astutely addressed by Todd Sullivan in this article. We know it won't be this coming year, and very likely not the year after. For all we know it may be worse the year after. No guidance was given for further ahead than fiscal 2013. It is flabbergasting that this question is not answered, but even more that a stock is rising as a reward for greater forecasted losses in the future. History shows that such an irrational imbalance will not last. The answer to this question is important. After all, the value of each company is ultimately determined by its ability to make money for its shareholders. The company does not answer this question, other than it won't be for the next year or two. So what is this pot of gold that believers see at the end of the rainbow? There must be one, right? Maybe we can get a hint from a Salesforce fan who posted the following under the nickname Saaspaas:

      "Now think about what happens once those salespeople become productive, i.e. generating more than they cost. They are selling a subscription-based software license. They will get paid a nice commission upon the original customer sales, but as those customers renew there is very little sales and marketing expense involved. "

      My reaction:

      I don't follow this. First of all, you assume that existing customers will automatically stay on board. That is not a sure thing in an increasingly competitive arena with Salesforce.com offering the most expensive solution of them all. Twenty years ago I used WordPerfect for wordprocessing and 15 years ago Netscape as my browser. Altavista was my favorite search engine. Microsoft is already offering incentives to Salesforce customers to switch to their solution.

      Secondly, are you suggesting that all those salespeople being hired now (and creating revenues at a loss for the shareholder) are going to be laid off when the growth comes to a halt? If not, you would not cut their costs, would you? Besides, for the reasons mentioned, I think they will keep needing those salespeople to keep the existing apples in the basket. Unless they slash the price of their product. Neither is positive for the already negative bottom line.

      Read this recent article:


      "It was tough to sell Salesforce.com at $125 a user when we had a comparable Microsoft CRM offering at $44," said Betz, who will assume the role of managing director of CRM at Armanino McKenna. "We were able to knock down some pretty substantial deals in the northwest and that got us as a priority partner with Microsoft." Gateway and Armanino McKenna are on Microsoft's CRM Partner Advisory Council.
      http://rcpmag.com/articles/2012/02/22/microsoft-partner-armanino-extends-crm-practice.aspx

    • if u have such a perfect crystal ball, why r u sticking to Yahoo boards? sell it short and go to Hawaii or something :)
      otherwise it is just one man's opinion & that man got it wrong last few days.

    • America is being crooked by Ben, and Obama. Analysts saving their jobs. We see a crash.

    • Bidu has a market cap of 47 Billion and is trading at 19 times 2013 revenues.Just another case of Wall Street fraud however dont fight these clowns just let them walk the price higher and higher till the bubble finally pops which will happen this year!

      • 1 Reply to riterifff28
      • I find it absolutely amazing that most analysts report the "earnings" numbers and don't even bother to let people know that they are non-GAAP. Very misleading. At least report that the numbers are non-GAAP. I think most analysts probably just answer the phone when sfdc calls and prints whatever numbers they are given. They are probably just too lazy to verify/check anything out for themselves so they take the easy way out and print whatever they are given verbatim.

        Analysts reporting non-GAAP numbers without making it clear that they are reporting non-GAAP numbers seems like a really slippery slope to me. I wonder why more companies don't take advantage of this and only give non-GAAP numbers to analysts for them to reprint.

    • The 80 million one time employee option compensation is not really one time, it is for every quarter.

    • BofA target is now $200/share or around a 27 billion market cap.

      Not bad for a company that projects a loss of .53/share in 2013.
      Revs beat due to new billing practices and acquisitions.

      CRM will fall some time in the next year and ikt will fall hard and fast.

      • 1 Reply to mrmarkaallen
      • I see that the analysts are truly perpetuating a scam here. It's beyond crooked and irresponsible of them to recommend this stock.

        What are the mechanics behind these crooks keeping the price up? Besides hoodwinking the public into buying, what is the actual buy practices that are going on ? How do they manage on a daily basis to defeat what I think should be an avalanche of selling?

        I'm trying to get a read on when the house of cards will collapse.

 
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