Salesforce has 'attractive risk-reward' as more activists get involved: Wedbush
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Cloud computing giant Salesforce (NYSE:CRM) has an "attractive" risk-reward at current levels, investment firm Wedbush Securities said on Thursday, notable given the continued involvement of activist investors.
Analyst Dan Ives, who has an outperform rating and $200 per-share price target on Salesforce (CRM), said the company has suffered from a management exodus, troubled acquisitions and weak free cash flow growth, all of which have resulted in activists getting involved and a "perfect storm" being created for CEO Marc Benioff.
"Ultimately we view [activist involvement] all as a much needed positive for the story to put pressure on under performing assets and strategically look at possible spin-offs over the next 6-12 months depending on outside strategic interests as well as further cost cuts (headcount cuts already announced in early January)," Ives wrote in a note to clients.
Late on Wednesday, it was reported that hedge fund Third Point, run by Dan Loeb, had taken a stake in the company.
In addition to Third Point, hedge funds ValueAct, Elliott Management, Inclusive Capital and Starboard Value also own stakes in the Marc Benioff-led Salesforce (CRM). 
Ives added that it looks as if deal flow for Salesforce (CRM) has "stabilized" and the company is slowly improving after several quarters in which it underperformed expectations.
The company is dealing with not only the aforementioned management exodus, but also a slowing economy, mass layoffs and now pressure from activist investors. However, it's possible that the company emerges 2023 in a stronger financial position, particularly as it goes up against Microsoft (MSFT) in the cloud and collaboration spaces, Ives explained.
Salesforce (CRM) is slated to report fiscal fourth-quarter results on March 1.
Late last month, investment firm Morgan Stanley said Salesforce (CRM) could wind up growing earnings at 20% or more due to activist involvement.