Salesforce shares set to tumble-Barron's

NEW YORK Sun Jan 23, 2011 5:17pm EST

NEW YORK Jan 23 (Reuters) - It will be difficult for shares of cloud computing company Salesforce.com Inc (CRM.N) to go anywhere but down, according to a report in the Jan. 24 issue of Barron's.

The shares of the company have risen 92 percent over the past year and analysts are trading traditional valuation metrics for those popular during the dotcom boom days: cash flow and earnings excluding employee-options expense, according to the report.

Insiders like Chief Executive Officer Marc Benioff are selling- rather than buying- shares and tech giants Microsoft Corp (MSFT.O), Amazon.com Inc (AMZN.O), Google (GOOG.O), Oracle Corp ORCL.O and SAP AG (SAPG.DE) are growing into serious competitors.

"No doubt Salesforce shares will continue to fly high, as long as the company -- which boasts a solid balance sheet with $1.3 billion of net cash and investments -- continues to boost its revenue at a 20% to 25% annual clip . . . but any hiccup now could send the shares tumbling hard, especially if investors analyze the company's sharp rise in expenses and the continuously growing number of diluted shares outstanding," Barron's wrote. (Reporting by Clare Baldwin; Editing by Bernard Orr)

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