Back in December I wrote that Oracle (ORCL) should acquire Salesforce (CRM). Activist investor Elliott Management may force a CRM sale, Oracle is the natural acquirer in our view.

• Salesforce has not had an operator at the helm capable of driving operating margin expansion since Keith Block left his co-CEO post in February 2020.

• Salesforce requires a hard-ass personality like Keith Block’s to change the culture to one that is outcome-based rather than a feel-good culture (or however Salesforce co-founder & CEO Marc Benioff would describe CRM’s culture). One thing is for sure – Benioff is not the answer to Salesforce’s problems.

• Salesforce now has two activist investors as shareholders – Starboard Value (read their CRM presentation HERE) and now Elliott Management. Our view is that Elliott Management will force a sale. I don’t believe that Benioff would be able to stomach the culture change that would be required to reshape Salesforce into a highly profitable company – he would rather sell than make those changes himself or observe another CEO make those drastic changes. I believe Elliott would prefer a quick ROIC (a sale) rather than an operational experiment. Our money is on a CRM exit to Larry Ellison’s ORCL.

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