Salesforce Turns Bullish on Acquisition of Attic Labs

Salesforce Turns Bullish on Acquisition of Attic Labs

 
Cloud computing company Salesforce.com, inc. (NYSE: CRM) is acquiring Attic Labs, according to the announcement on their home website. Attic Labs, which was founded in 2015 by Aaron Boodman and Rafael Weinstein, is the creator of Noms, a decentralised database that makes it easy to store, move, and work on a huge amount of structured data. In addition to the acquisition news, there are few other developments which indicates that the stock of Salesforce will turn bullish in the days ahead. Salesforce ended Wednesday’s trading session at $108.80.

As a startup, Attic Labs raised $8.1 million Series A in 2016 from Greylock Partners and Harrison Metal. Even though the company announced that it is going to be acquired, the details of the deal were not revealed. Following the completion of the acquisition, Attic Labs’ team will join Salesforce’ Quip division. Quip is the document-collaboration platform acquired by Salesforce in 2016, for a sum of $750 million. Quip offers a platform similar to Alphabet’s Google Docs, which facilitates sharing and editing documents. Noms has several advanced features, compared to tools like Git. The capabilities of Quip division and the additional features offered by Noms will certainly attract more users to subscribe to this service, instead of Git. Acquisitions have always been the strength of Salesforce. In 2016, Salesforce acquired 12 companies.

The company has also revealed its ambitious growth targets. During a presentation made to a group of analysts, Salesforce’ CTO and co-founder Parker Harris has revealed the company’s aim to achieve a revenue of $40 billion by 2028 and $60 billion by 2034. It is a well known fact that the company is aiming to achieve a revenue of $20 billion by 2022. The new targets have raised the eyebrows of traders and investors.

Last Saturday, Salesforce signed an agreement with Google to provide easier integration between Salesforce tools and Google’s G Suite and Google Analytics. Salesforce also announced Google as a preferred cloud provider for its core services. The series of positive developments is expected to take the stock to new heights in the week ahead.

Technically, the stock is trading above its 50-day moving average. Further, the Chaikin money flow indicator and the MACD histogram are rising. Thus, we can expect the stock to rally soon.

Salesforce - Technical Analysis - 11th January 2018

In order to gain from the predicted uptrend, we wish to invest in a call option valid until January 19th. Before locking our money in a call option, we will make sure that the stock is trading near $108 in the equity markets.

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading.


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