The stock price of Slack Technologies Inc. trading under the symbol (WORK) is seen on a display above the floor of the New York Stock Exchange (NYSE) during the company’s direct listing in New York, U.S. on June 20, 2019. (Reuters Photo)
U.S. 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%.
Trade was temporarily suspended but prices were still up nearly 24% around 1 p.m. (1800 GMT).
Salesforce – which specializes in technology that allows businesses to communicate with clients – fell nearly 3%, however.
The two companies have begun merger discussions for an agreement that could see Slack valued at more than the present market capitalization of $17 billion, 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 and data visualization tool Tableau for $15.7 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% increase in revenue for May, June and July, to $216 million. The platform counts 130,000 paying clients.