Slack Technologies, Inc. (NYSE:WORK) – $5 Target

Slack was up 10.3% Tuesday, to $23.13, after an analyst made a bullish call.

That is the single biggest move in the stock since its IPO last summer. Analyst’s average consensus is $27.32 which is still $4.01 above today’s price..

We call the BS

Slack shares have fallen 40% since being listed – why?

When the reality of Wall Street hit the cushioned and overhyped Silicon Valley valuations – real pricing kicked in.

Same happened to WeWork and their IPO – that never was.

According to Morningstar, $WORK has a short interest of 44.85M out of the 194.09M free float – representing 23.11%.

“Slack has become something of a default term that embraces reactions such as annoyance, irritation and peculiar skin rashes. My impression is that many employees — and I have had the desperate privilege of using Slack myself — find it an all-enveloping time-sink that can sometimes be as productive as shaving your eyebrows with a lawnmower.” – a quote by Chris Matyszczyk with which we agree.

5 reasons here for serious concern:

  1. Its revenue growth is slowing down
  2. It’s hugely unprofitable
  3. It’s burning through cash at a rapid rate
  4. Its corporate governance is not shareholder friendly
  5. Paid for conversions rates are dropping at an alarming rate

It seems Slack creates more work for you – than helping you do more work.

A great short, we see the stock at $5 in 2020. 🐻📉

 

Luka Marjanovic

Chief Analyst

Luka holds a Bachelor’s in International Business from Denmark and a Master’s in International Management from ESADE. During his undergraduate studies he founded his own consulting firm, providing services to local businesses in various sectors; as well as working as a research assistant in the field of Big Data. Prior to his education he served in the Danish Royal Army as Second Sergeant, leading and managing a group of men, under extreme pressures and conditions. Luka has spent significant time abroad, living and working in six different countries.

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