Categories LATEST

Slack Technologies (WORK) stock nears record low on future concerns

Slack Technologies Inc. (NYSE: WORK) stock has fallen over 43% since its initial public offering on June 20, 2019. The shares have been gearing up to recover from the slump with the three-month decline now at 0.27%. The stock, which has been trading between $19.53 and $42 since the IPO, is now nearing the record low due to future and probe concerns.

Investors were concerned about the US Securities and Exchange Commission investigation of the public listing of Slack and other major companies. The agency has begun the probe that partly focuses on how trading was handled on the first day of the IPO on the New York Stock Exchange, according to a Wall Street Journal report.

Slack Technologies (WORK)
Courtesy: Webaroo.com.au on Unsplash

The agency started questioning about how the companies achieve valuations of more than $1 billion before going public for over the past several years. The market experts remained puzzled about the investigation as to the target of the probe and the types of misconduct the SEC might suspect.

Meanwhile, the market analysts were cautious about the company’s future due to the decelerating revenue trends. Also, the bottom line could be impacted by an increase in investments arising from maintaining industry-leading uptime and in international expansion, particularly within its direct sales organization.

Slack continues to invest in its user experience, scalability, platform and new features such as shared channels. The company expects research and development expenses to grow roughly in line with revenue growth in the fourth quarter.

Read: Pinterest stock in a cautious stance

As of October 31, 2019, the company’s principal sources of liquidity were cash, cash equivalents, and restricted cash of $515 million and marketable securities of $297.6 million. Since inception, Slack has financed its operations primarily through proceeds from the issuance of convertible preferred stock and common stock and cash generated from the sale of subscriptions.

In the past, the company has generated significant losses from operations and negative cash flows from operating activities as reflected in its accumulated deficit of $1.1 billion as of October 31, 2019. Slack expects to continue to incur operating losses for the foreseeable future due to the investments that will make in its business and, as a result, it might require additional capital resources to grow business.

Listen to on-demand earnings calls and hear how management responds to analysts’ questions

Most Popular

ADBE Earnings: Adobe Q1 2024 revenue and profit beat estimates

Design software maker Adobe Inc. (NASDAQ: ADBE) on Thursday reported an increase in first-quarter 2024 revenue and earnings. The results also surpassed analysts' forecasts. First-quarter revenues came in at $5.18

Earnings Preview: FedEx (FDX) likely to report higher revenue and profit for Q3

FedEx Corporation (NYSE: FDX) delivered positive earnings performance and margin expansion in the first half of fiscal 2024, despite lower revenues. The cargo giant has been on a path of

Key takeaways from Dollar General’s (DG) Q4 2023 earnings report

Shares of Dollar General Corporation (NYSE: DG) fell over 4% on Thursday despite the company delivering better-than-expected earnings results for the fourth quarter of 2023. The top and bottom line numbers

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top