Market value sunk $3 billion from $20 to $17 billion after latest earnings call shows liquid cash flows are down due to increase in spending. Outcome is layoffs by reducing costs to free up liquid cash flow so to pump up the stock price.
Likely to be bought out by Cisco whose market value is $220 billion or over 10 times that of Splunk. Outcome would be layoffs as that is what Cisco is known for.
Close of the markets today saw Splunk stock drop by another $1 billion in share value down to around $16 billion. How sad.
I guess a long term lease of an entire building at 700 Santana Row a shopping mall in San Jose, CA with 300,000 square feet of office space wasn't such a good idea after all. Hindsight is 20/20.
https://rebusinessonline.com/splunk-signs-301000-sf-office-lease-at-700-santana-row-in-san-jose/
The last post said it all.
The down slide has begun as they can’t hire sales reps fast enough. The best are continuing to stream out the door as their stock refresh RSU grants are winding down vesting periods. This $2B company has only made two substantive acquisitions in past 3 years which have given sales new things to sell into the customer base. Product innovation has stalled fully in lieu of pie-in-the-sky projects that are proving unattainable.
What they have now is responsibility for 35% YoY revenue growth with only one way to address this which is hire another 650 sales people globally each year, raise quotas, and shrink territories. Purposeful setting up of sales reps to make over-achievement and accelerators rare, eliminate uplift on channel sales, reduce partner margins, decelerate Perp and Cloud license commissions/quota, are all ways that they are trying to slow the increasingly upside-down Cost of Sales that strangles any hope of profitability.
Best thing they could do is sell soon, walk away rich and bury any deeper scrutiny of how they have derailed a formerly great tech company and success story.
They're too bloated a company and a good round of layoffs around 15 to 20 % is required to get rid of deadweight.
They also took money and invested it in new offices in San Jose to ramp up hiring of hundreds of people there which was a gamble that they lost. Now they have no liquidity or free cash and the tech market is heading to a downturn and bubble.
id--tS!!!
The very first post on this thread saying splunk doesn't do large layoffs is being proven wrong. To pump up stock price revenue growth and cash flows are but a few metrics to keep stock high. Since splunk does do layoffs but not on a large scale they will do large scale layoffs and hiring freezes soon. A 5% to 10% cut is coming in this year so watch out.