Yesterday, Salesforce.com announced it would be offering $500 million aggregate principal amount of convertible senior notes due 2015, in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. In layman’s terms: Salesforce’ll be floating a $500 million convertible bond offering, the bonds are due in 2015, and the cloud-computing evangelists will enter hedge fund transactions to minimize future dilution on shareholders.
Salesforce.com stock has previously fallen 5.5%, to $69.59, but they are still doing extremely well and dominate the cloud-based CRM market—so many people are scratching their heads over why exactly a company with cash is floating debt.
Most likely, Salesforce.com is going to use these funds for acquisitions. Salesforce has long been at the forefront of SaaS CRM, but they still need a strategy to remain at the market’s helm. And as they specified such a large amount of money, it seems less likely that Salesforce is taking advantage of low rates, and more likely that they have a specific use for the money in mind.
Given the completeness of Salesforce’s grasp CRM offering it could be any number of things, but what do you think they have their eye on?