SAP’s market cap falls by $30 billion, worst trading day in a more than a decade

SAP just saw its market cap fall by 25 billion euros ($30 billion) and its shares plummeted by more than 17% on Monday. The shares collapse happened after the German enterprise software group posted its below-expectations third-quarter results.

Although the company slashed its 2020 revenue forecast, it still saw its valuation fall to 100 billion euros from 125 euros. SAP is also on track for its worst trading day in over a decade. It said the coronavirus pandemic lockdown on both national and global levels affected demand for its business relations services and customer management software which could extend to 2021.

In preparations for adapting to the post-COVID economy, SAP has announced that it plans to go fully into cloud computing. It said that recovery from the pandemic may last longer than expected, therefore, medium-term profitability targets will be abandoned.

“As the CEO of SAP, I have to be focused on the long-term value creation of this company,” said Christian Klein, SAP chief executive. “So I cannot trade the success of our customers and the significant revenue potential of SAP against short-term margin optimization.”

Financial and banking giant JPMorgan downgraded SAP’s stock to “neutral” from “overweight, and slashed its price target to 120 euros from 160 euros.

SAP has had its fair share of financial turbulence since the wake of the coronavirus pandemic in the U.S. What began as a seemingly profitable year for SAP took a turn.