Salesforce buying Slack for $27.7 billion
Business software pioneer Salesforce.com is buying work-chatting service Slack for $27.7 billion in a deal aimed at giving the two companies a better shot at competing against longtime industry powerhouse Microsoft.
The acquisition announced Tuesday is by far the largest in the 21-year history of Salesforce. The San Francisco company was one of the first to begin selling software as a subscription service that could be used on any internet-connected device instead of the more cumbersome process of installing the programs on individual computers.
Salesforce's flamboyant founder and CEO Marc Benioff hailed the "cloud computing" concept as the wave of the future to much derision initially.
But software as a service has become an industry standard that has turned into a gold mine for longtime software makers. Microsoft for one has developed its own thriving online suite of services, known as Office 365, which includes a Teams chatting service that includes many of the same features as Slack's 6-year-old application.
"For Benioff, this is all about Microsoft," Wedbush Securities analyst Dan Ives said of Tuesday's deal. "It's just clear Microsoft is moving further and further away from Salesforce when it comes to the cloud wars."
Mnuchin defends limits on Fed loans
Treasury Secretary Steven Mnuchin is defending his decision to close down a number of emergency Federal Reserve loan programs at a time when coronavirus cases are surging.
Mnuchin argued that the programs he decided not to extend into next year were being lightly utilized. He said the $455 billion allocated for those Fed loan programs could be better used elsewhere if Congress moved the funds into relief programs for small businesses and unemployed workers.
Democrats aired their criticism Tuesday as Mnuchin and Federal Reserve Chairman Jerome Powell testified at a Senate Banking Committee oversight hearing about the $2 trillion CARES Act approved by Congress last March.
Powell, as he had before, urged Congress to authorize further economic support, something that lawmakers have been struggling to do for months.
Sen. Mark Warner, D-Va., and one of the lawmakers involved in the centrist effort, got both Mnuchin and Powell to agree that the proposal being discussed was something that would help the economy.
Powell told the committee to think of the additional relief as a "bridge" to get the economy from the current situation with rising virus cases, to a period when the vaccines will be widely distributed."
Tesla CEO urges focus on profits
Tesla Inc. Chief Executive Officer Elon Musk warned in an internal email his company's rallying shares could get "crushed" if investors start to worry about the electric-car manufacturer's ability to deliver on profit expectations.
Musk urged employees to stay focused on cutting costs and prevent a reversal in Tesla's soaring stock price in an email sent Tuesday to employees as the Palo Alto, California-based company works to meet a target of delivering half a million cars this year.
"When looking at our actual profitability, it is very low at around 1% for the past year. Investors are giving us a lot of credit for future profitability, but if, at any point, they conclude that's not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!" Musk wrote in the email viewed by Bloomberg News.
Tesla did not respond to a request for comment.
The carmaker's stock has skyrocketed almost 600% this year, in part on expectations of joining the S&P 500 Index — which it will do on Dec. 21 — and of posting a fifth consecutive quarter of profit, which it did in October. Musk and Chief Financial Officer Zachary Kirkhorn have been focused on cost reductions for several quarters even as Tesla spends billions on new factories in Austin, Texas, and Berlin to expand its global production and sales footprint.
— Compiled by Dave Flessner