What's the Beef with: Slack Tech stock analysis

Slack Technology Inc. (WORK)

Slacking off or $work(ing) hard? What a play on words, but Slack technologies mean business and from the get go are doing things differently. This American software company and popular work messaging service decided not to do an Initial Public Offering (IPO) but rather do a direct listing.

Direct listings might be an alternative approach, but not uncommon as Spotify also opted for a direct listing in 2018. Both these brands are world renowned which counts in their favour as is evident in the 48% gain from it’s $26 per share reference price we saw on Slack’s debut. The stock closed at $38.62 per share which valuated the company over $20 Billion.

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What is a direct listing you may ask? A direct listing allows companies like Slack to go public without selling new shares of its stock. Companies instead bypass the exorbitant fees associated with IPO’s (like roadshows, hiring investment bankers) and begin trading by selling existing shares held by investors, insiders and employees. 

Slack’s main objective is to replace traditional methods of communication in the work place, and for companies adopting a more Agile way of working it fits in perfectly. Slack Technologies Inc. has over 600 000 companies across 150 countries using its service.

Chart Life:

As software as a service (SaaS) continues to be sought after, we might expect companies like Slack to be a great long-term prospect.

Source - Bloomberg

Portfolio particulars:

• Portfolio Buy (Current)
• Portfolio Buy opportunity: around $36.00 per share, might be revised lower.
• #WhatsTheBeef Long term Target price: $42.00 per share (Future)

Know your company: Slack Technologies Inc. (Work)

• Slack began as an internal communications tool for Slack CEO and Co-founder Stewart Butterfield’s company Tiny Speck during development of the online game Glitch.
• He recently joined the Billionaires club with his 8.6% stake in Slack at the opening of listing day.
• Slack is an acronym for “Searchable Log of All Conversation and Knowledge” 

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Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.