Just over a month ago (a month ago from Memorial Day), CRM dropped from around 56 to the 48-50 area. It may be that now that gap down has been filled and the stock is at a main resistance area, that CRM will resume dropping from here. This is an agreement, not a purchase of one company by another.
The charts show strong resistance here and more resistance just above here and far below 65. If you choose to ignore charts, please post data for your prediction.
jsv0969, that seems like a biased comment, not an "honest question." Comments don't scare people, but may lead to analysis. Analysis includes wondering why you are posting here. Why should you care what is posted here?
If you're bullish about CRM, then "buy, buy, buy." Longs were fortunate in July 2013. It took until February 2014 for CRM to start breaking down when expectations weren't met and were lowered.
Are you referring to the hidden payroll that dilutes (translation: reduces) the value of the stock for longs even while showing cash flow.
In the past, "pay to play" became public when Larry Ellison return a million dollars to the CRM CEO who had paid to give a keynote speech and Ellison wouldn't approve the time of the speech. I don't expect the cost of giving a speech at this conference as high. The question is whether speakers at this conference will pay or "donate" money to the conference.
Spending much more money to establish lavish presences in London and Vancouver won't help the stock price through at least 2015 and even the CEO has said he doesn't expect earnings until at least 2016. What does that mean when it comes from a CEO who has been more optimistic than warranted in the past?
CRM was a short when it was in the 60's. It continues to be a short despite what some other stocks do. CRM is in the tough position of being too expensive for other companies to buy and doesn't have the funds to acquire growth with earnings. Some would even argue the use of the term "growth" when there aren't earnings in a 15 year company. Some have argued that anyone can show "growth" by charging less than expenses. However, some don't consider that growth when a 15 year old company has revenues without earnings.
How much money might a company spend to try to get people to ignore the lack of real earnings? There are many examples of stocks that faltered and then descended more and more.
None of this changes the facts that CRM doesn't have GAAP earnings and has admitted that they don't expect any GAAP earnings until after FY 2016. Recent reports about increasing expenses may be troublesome. Excessive rents and naming rights, along with a report about insiders getting trips to Hawaii (in addition to continuing equity awards) are likely to delay earnings more. Some doubt CRM won't have GAAP earnings even years beyond what the company has announced.
Competition and pricing pressures are increasing with the possibility that value companies with deep pockets will continue to buy small cap competitors in the single digit billion dollar price range.
CRM rolled over at the end of regular trading hours. The 50 day MA is poised to drop below the 200 day MA. Though there was a bounce today, the stock couldn't hold levels that were reached before releasing the quarterly report. CRM now has lower highs.
CRM's defenders remind me of RIMM, when RIMM bulls couldn't believe that competition could hurt RIMM. After RIMM's initial drop from the 120's to the mid-50's, it rallied into the 80's. I shorted at 89 and 91 and didn't feel good about it when the stock went higher into the 90's. I added in the 98-99 area, when some people couldn't imagine (or wouldn't admit to the public until they unloaded) competitors could contribute to toppling RIMM.
Last year when people were still talking about RIMM, I heard compliments for managers and for analysts who had turned negative about RIMM when it was 30 and there were "wows" about someone having turned negative on RIMM at 35 or 40.
At its top, RIMM was seen as impervious to competitors. Though RIMM and CRM have different products and services, the commonality is competition. There is growing competition facing CRM and the competitors have money that RIMM doesn't. That's one of many reasons I'm negative about CRM.
Free cash flow is created when insiders who acquired shares for little or no money sell those shares at market price. But there's no accounting for the "gifts" of monetary value to insiders. The cash flow "follows on the heels" of gifts of value handed out to insiders. The insiders get the value.
My broker's figure isn't the problem. I trust my broker's figure. If yesterday's volume figure remains on Yahoo finance, some people might misinterpret it.
Most of the time, the "enterprise value" is shown as being higher than the stock value. According to Yahoo Finance, there aren't specific ways of arriving at the "enterprise value." Do those predictions from CRM follow a distinct formula or are they wishful despite CRM doesn't even have GAAP earnings? If there are small GAAP earnings in the future, the future PE will likely plummet since a three digit PE would require sizable earnings.