Friday, February 5, 2016

Bloodbath in the Cloud as Salesforce, Workday, ServiceNow Take It in the Gut

Bows and flows of angel hair and ice cream castles in the air
and feather canyons everywhere, I've looked at clouds that way.
But now they only block the sun, they rain and snow on everyone.
So many things I would have done but clouds got in my way. 
I've looked at clouds from both sides now,
from up and down, and still somehow
it's cloud illusions I recall.
I really don't know clouds at all.... 
-Joni Mitchell, Both Sides Now, 1967
From Barron's Tech Trader Daily:

Shares of numerous cloud companies this morning are plunging, following a 40% decline in shares of LinkedIn (LNKD), and a nearly 50% decline in shares of Tableau Software (DATA), which, while not a cloud company per se, is neveretheless not helping high-valuation names like (CRM), Workday (WDAY), and ServiceNow (NOW).
Workday is down $9.49, or 15%, at $55.35; Salesforce is off $10.97, or 24%, at $59.82; and ServiceNow is off $8.77, or 15%, at $49.85.
The proximate cause is the lower forecast yesterday afternoon from LinkedIn, with the company talking about streamlining its business.
Re/code’s Kara Swisher was on CNBC’s “Squawk Alley” segment  this morning to discuss the carnage.
“I think it’s just a worry over growth,” said Swisher. “Their numbers are substantively — hundreds of millions of dollars — below what they promised,” speaking of LinkedIn. “I think high growth is what it’s about. Usually, LinkedIn is a little more tight about their messaging. They have nothing to be ashamed of. I think investors are just spooked.”
Price targets for LinkedIn are being slashed right and left this morning, even though many bulls maintain the company’s “model” is “not broken.”...MORE