On September 30, Slack Technologies Inc. (NYSE:WORK) shares surged 9% after a bullish publication in Barron’s. The publication suggested that the recent weakness of Slack’s stock could chance for investors to buy-in.
Shares jump following bullish publication
In recent months most newly public technology companies have lagged. Investors have growingly been having concerns regarding growth stocks without a definitive path to becoming profitable. According to Barron’s, Slack Technology is unfairly being considered among the growth stocks. The publication quotes some bullish Wall Street market analysts and hedge fund executives pointing to solid engagement as well as the best-in-class partnership platform while at the same time talking down competitive concerns regarding Microsoft Corporation (NASDAQ: MSFT).
Bhavan Suri of William Blair indicated that Microsoft seems to be a fairly incomplete product set relative to Slack in form of functionality. He adds that integrations are significantly minimal. Suri started covering Slack during the summer and gave the stock a buy rating. He was encouraged by the fact that the company already had 645 paying clients generating more than $100,000 each in revenue per year.
Slack Tech went public through a direct listing
Slack Technologies is relatively solid when it comes to its financial position compared to most of its rivals. The company has a strong balance sheet with cash of around $800 million.Slack Tech Chief Executive Officer Stewart Butterfield indicated that the amount of cash they have was the main reason they decided to go public.
The company went public through a direct listing rather than having to go the traditional IPO route. The CEO said that the company didn’t want to raise capital because they already were in a strong financial position and also they were not willing to dilute current shareholders.
Since the company went public its stock has been declining for months and on Friday it closed 43% down from its first trade in June. According to Barron’s publication, the selling activity might be a result of existing stockholders trying to cash out.
