This was approximately one percent of its market value, and SAP’s stock price skyrocketed. On April 24th 2019, SAP’s stock price was 115 euros, making Elliott’s investment really convenient for the company and Bill McDermott.
Shortly before, financial analysts have made predictions about SAP’s stock price. Goldman Sachs saw it at 121 euros; Credit Suisse at 120 euros; the Deutsche Bank at 108 euros; and UBS from Switzerland at 105 euros.
SAP’s quarterly figures were just as expected, therefore. There was a big minus due to restructuring efforts and the layoff, but enormous revenue growth with its cloud business because of acquisitions like Callidus and Qualtrics.
What about Qualtrics?
Whoever kept an eye on Qualtrics these last months saw an agile company that tried to differentiate itself as much from SAP as possible. But that’s a different story.
Up for debate
SAP’s stock price is up for debate. Maybe everyone’s happy now, because everything happened exactly as predicted. Shareholders hate nothing more than unforeseen complications. But maybe everyone just wants to benefit from the success of U.S. hedge fund Elliot, without really caring about SAP.
What’s not up for debate is CFO Luka Mucic’s excellent work. He’s really outdone himself this time.
He talked about some restructuring efforts at SAP that sustainably improve Capex; for example, Hana and cloud now run on IBM Power instead of Intel servers. Consequently, he successfully diverted the attention away from SAP’s shortcomings.
Subtlety is not Bill McDermott’s strong suit
Bill McDermott didn’t have such subtle tricks up his sleeve. He tried to sway customers with unwavering optimism. That also included not sticking to the truth. He lied when he said that former CTO Bernd Leukert left SAP voluntarily.
Then he essentially said that the executive board as it is now is the best he could ever hope for; right after his best shot at a sustainable cloud strategy, Rob Enslin, left for Google and Michael Kleinemeier’s successor left the company involuntarily.
SAP’s stock price in no way reflects the complex problems that the company faces right now. It will remain steady for some time; it takes a lot to completely destroy an enterprise like SAP. And until there is nothing left to ruin, Bill McDermott will stay in charge.
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