Slack: Wheels Just Fell Off

Slack fell hard due to revenue growth expectations failing to meet expectations.
The company is facing a period of decelerating revenue growth that always hits high multiple stocks very hard.
A valuation of 8x FY22 revenues places the stock at only $17.50.
By all accounts, Slack Technologies (WORK) reported a solid FQ2 for the first quarterly report following their hot IPO back in June. The stock was already down substantially from the highs above $40, but the IPO rally was so outrageous that investors should expect the IPO pricing at $26 is broken. My original research was bearish on the stock following the hot IPO, and the view hasn't changed much now.
Read the full article on Seeking Alpha. 
Disclosure: No position. Please review the disclaimer page for more details. 

Comments

vpg999 said…
This is at best a $5-$10 stock using "normal" bubble mulitples of 5x-10x sales = $4-7BN / 550MM shares. No sustainable advantage versus behemoth monopoly provider $MSFT. Sell at will, this direct listing and release of all shares to be sold the day after the slowing earnings report should be illegal. CEO and CFO dumping after first report is almost fraudulent.
vpg999 said…
**CORRECTION** CEO CFO CTO selling after first earnings report **IS** fraudulent and should not be allowed by the SEC. Street Justice will take this down to my price range by year-end 2019 on a wave of Form 4 filings.
Mark Holder said…
Would love to own the stock at $5.

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