Salesforce Spikes on Talk of Microsoft Buyout, Netflix Surges on Upgrade

NEW YORK (TheStreet) -- Salesforce.com (CRM) spiked following reports Microsoft (MSFT) may be interested in buying its rival. Netflix (NFLX) soared after Bank of America/ Merrill Lynch issued an upgrade on the company. Security software vendor Qualys (QLYS) plunged on a weak outlook.

Salesforce rose 1.6% to close at $72.75 while the broader markets finished the session in the red. During intra-day trading, Salesforce rose as high as 6.4% to $76.18.

Microsoft's interest, according to a report in Bloomberg, was prompted when another suitor entered buyout talks with Salesforce last month. Microsoft has yet to enter talks with Salesforce about an acquisition and currently exploring whether to make a bid, according to Bloomberg. Last year, Microsoft and Salesforce entered an agreement that would allow the companies to better integrate their software for improved performance when the technologies worked together, the report stated.

Salesforce is working with investment banks to evaluate its response to potential buyers, according to Bloomberg. The company offers a cloud platform and is best known for its customer relationship management software. Oracle (ORCL), Microsoft and others are just some of its rivals.


Netflix jumped 1.9% to end the day at $565.55 a share.

The online streaming video company soared after Bank of America/Merrill Lynch upgraded it to a buy from underperform. In making the upgrade, the firm's analysts pointed to its strong portfolio that houses its original content, as well as its significant opportunity overseas.

The analysts also increased Netflix' price target to $722 from $350, according to a report in Benzinga. The report further noted that analysts expect Netflix to expand its international audience to 50 million users by 2017, up from its current 20 million. Over the long term, the analysts anticipate Netflix getting as large as 120 million users overseas.


Qualys tanked 32.8% to close at $37.03.

The security software maker plunged after it issued a second-quarter forecast of earnings of 9 cents to 11 cents a share on revenue between $39.5 million to $40 million. Prior to its forecast, analysts were expecting earnings of 13 cents a share. 

For the full year, Qualys said it expects earnings of 50 cents to 55 cents a share on revenue of $165 million to $166.5 million. Wall Street, however, was expecting earnings of 53 cents a share. According to a MarketWatch report, Qualys previously had a forecast of revenue ranging from $167.3 million to $169.3 million.

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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