US software firm Salesforce plans to buy corporate messaging platform Slack, the Wall Street Journal reported Wednesday, leading to a jump in stock prices for the young company.
Slack, which has enjoyed increased popularity since the beginning of the coronavirus pandemic, saw its shares surge 32 percent.
Trade was temporarily suspended but prices were still up nearly 24 percent around 1:00pm (11:30pm IST).
Salesforce, which specialises in technology that allows businesses to communicate with clients, fell nearly three percent, however.
The two companies have begun merger discussions for an agreement that could see Slack valued at more than the present market capitalisation of $17 billion (roughly Rs. 1,25,500 crores), the Journal reported.
“If Salesforce does head down this path it would set off a chain reaction for more cloud software deals in 2021,” Wedbush analyst Dan Ives said.
It could pave the way for more mergers in the cloud tech sector, Ives said, especially since the move could set up Salesforce as a competitor for Microsoft, which owns Slack rival Teams.
Salesforce acquired data software company MuleSoft in 2018 for around $6.5 million (roughly Rs. 47 crores) and data visualisation tool Tableau for $15.7 billion (roughly Rs.1,15,900 crores) in 2019.
Slack, which purports to make it easier for teams of employees to collaborate online, has boomed as remote working has gained a cultural foothold during the COVID-19 pandemic.
In its latest quarterly report, the company declared a 49 percent increase in revenue for May, June and July, to $216 million (roughly Rs. 1,600 crores). The platform counts 1,30,000 paying clients.
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