What happened

Shares of salesforce.com (NYSE:CRM) fell 8.9% on Wednesday after the cloud computing leader announced a blockbuster acquisition alongside its fiscal 2021 third-quarter results. 

So what

Salesforce's revenue jumped 20% year over year to $5.42 billion, besting Wall Street's expectations for revenue of $5.25 billion. The software giant also delivered strong profit growth; its adjusted operating income climbed 23% to $1.1 billion.

The coronavirus pandemic is driving more companies to adopt work-from-home arrangements and distributed workforces, which in turn is accelerating their shift to the cloud. "We're rapidly moving to an all-digital world, where work happens wherever people are," CEO Marc Benioff said in a press release.

A person is pointing to a digital stock chart that rises sharply then falls.

Despite posting solid Q3 results, Salesforce's stock fell sharply on Wednesday. Image source: Getty Images.

Investors, however, focused more on Salesforce's plans to purchase Slack Technologies (NYSE:WORK). It agreed to buy the workplace collaboration platform for a staggering $27.7 billion in cash and stock.

Now what

Benioff called the deal a "match made in heaven." He envisions combining Slack's messaging tools with Salesforce's ecosystem of software solutions to create "the operating system for the new way to work." "Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world," Benioff said. 

Investors, however, seem less excited about the combination, particularly when factoring in the massive price Salesforce is paying. Citi analyst Walter Pritchard lowered his rating on Salesforce's stock on Wednesday from buy to neutral and reduced his price forecast from $300 to $250. Pritchard said the deal's $27.7 billion price tag makes it "challenging to see a positive return." 

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