Marc Benioff, Salesforce co-founder and chair, is bucking software sector trends by embracing leverage. Despite industry struggles, the San Francisco company raised $25 billion through bond sales and immediately announced a matching accelerated share repurchase. While not a leveraged buyout—Salesforce still commands a $180 billion market cap—the move reflects management's confidence amid a 25% stock decline this year.

The transaction uses derivatives to reduce shares outstanding immediately, though actual stock purchases occur over time. Wall Street appears unimpressed, with shares rising just 2% since the announcement. Salesforce captured attractive coupon rates between 4.5% and 6.7%, taking advantage of a flight to safety in debt markets that saw $112 billion in US high-grade debt offerings last week—matching only March 2020 levels.

Moody's downgraded Salesforce's credit rating from A1 to A2, criticizing the approach as financial engineering rather than productive investment. With just $10 billion net debt previously and $15 billion annual free cash flow, the company can afford the strategy. If Benioff is correct about undervalued prospects, the debt could boost returns; if wrong, Salesforce faces higher interest payments alongside AI disruption challenges.