“It wasn’t the right fit for us,” Salesforce CEO Marc Benioff told the Financial Times. His company’s shares are up about 6% today on the news.
His decision to steer clear of Twitter is a shift from last week when he told CNBC that “it’s in our interest to look at everything.” He added at the time that “while I look at a lot of things, I actually pass on most.”
Still, the comment troubled some Salesforce investors who consider Twitter too risky and likely too expensive at a price expected to exceed $15 billion.
With today’s stock price drop, the market values Twitter at about $11.6 billion. Its value has fallen about 43% over the last 12 months.
Many fear that Twitter’s symbols and protocols make it unappealing to non-users, which will limit its ability to grow. Twitter’s Q2 results disappointed Wall Street, especially as the company acknowledged that it saw “less overall advertiser demand than expected.”
Salesforce investors “are understandably concerned that an asset they either don’t understand well (or typically don’t like if they do) would account for such a substantial share of Salesforce.com’s value going forward were a transaction to occur,” Pivotal Research’s Brian Wieser said last week.
Asked about what led to his decision, Benioff told FT that “You’re going to look at price, you’re going to look at culture, you’re going to look at everything.”
The decision to not bid will increase the pressure on Twitter CEO Jack Dorsey to spell out his vision for the company on October 27 when he speaks to analysts after the company releases its Q3 earnings.