Back on May 26th, (CRM) hit its highest price level of the year.  Since then, the stock is down 19%.  Roughly around the same time that CRM peaked, shares of Twitter (TWTR) were hitting all-time lows in the high $13s.  Since those lows, TWTR shares are up 75%.



Back in late May at its highs, CRM had a market cap of just over $56 billion.  At that time, TWTR’s market cap was just under $10 billion.  The chart below shows the change in market cap for each company since May 26th.  As shown, CRM has lost more than $10 billion in market cap, while TWTR has gained more than $7 billion in market cap.

Most of TWTR’s market cap gains recently are due to buyout rumors that have really heated up over the last few days, while investors have crushed CRM for simply being in the mix on a TWTR buyout.  When investors sell a stock that hard on just the thought of a buyout, it says a lot about what they think of it.  Had CRM done the buyout back in May, though, they could have likely gotten a much better deal.  At CRM’s highs, Twitter’s market cap was 18% of CRM’s market cap.  As of this afternoon, TWTR’s market cap is 38% of CRM’s market cap.

Remember, LinkedIn (LNKD) was another name rumored to be on CRM’s radar earlier this year, but Microsoft swooped in and bought LNKD back in June.  After missing out on LNKD, investors think CRM would be reaching if they bought TWTR.  At this point, though, with CRM down so much, how much more downside is there even if Benioff and company do go for TWTR?  And if they don’t reach a deal with TWTR, how much will the stock rally?



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