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Salesforce shares tumble after surprise exit of co-CEO Taylor

Published Dec 01, 2022 08:46AM ET Updated Dec 01, 2022 10:01AM ET
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2/2 © Reuters. FILE PHOTO: Bret Taylor, Co-CEO of Salesforce, speaks at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France June 15, 2022. REUTERS/Benoit Tessier/File Photo 2/2
 
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(Reuters) -Shares of Salesforce (NYSE:CRM) Inc fell about 10% on Thursday after co-CEO Bret Taylor's sudden exit caught Wall Street off guard and raised concerns about the merit in having two leaders.

His departure after just a year in the role coincides with slowing revenue growth at the software company as it faces stiff competition from the likes of Microsoft (NASDAQ:MSFT), a stronger dollar and businesses cutting spending amid red-hot inflation.

At least 17 brokerages slashed their price targets on the stock, with the steepest cut coming from J.P. Morgan analysts who lowered their target by $45 to $200.

Jefferies analysts said the surprise exit indicated that the "co-CEO model is not working with two departures in three years."

Taylor, a tech veteran who has worked at Facebook (NASDAQ:META) parent Meta Platforms as technology chief and served as Twitter Inc (NYSE:TWTR)'s chairman, departs San Francisco-based Salesforce after six years, leaving co-founder Marc Benioff as top boss.

Benioff tapped Taylor as co-CEO in 2021, to replace Oracle (NYSE:ORCL) executive Keith Block who stepped down from the role just before the pandemic began.

Taylor was involved with Salesforce's software which helps businesses effectively manage customer interaction, and was a key driving force behind the company's $27.7 billion takeover of workspace messaging platform Slack Technologies (NYSE:WORK).

He was previously chief operating officer and chief product officer of the company.

"We view this leadership change as a significant blow given his leadership role on product," Needham analysts said in a note.

Shares of the company, which have lost about 37% so far this year, ended 5.7% higher on Wednesday before Salesforce's third-quarter earnings report.

Salesforce shares tumble after surprise exit of co-CEO Taylor
 

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