From an almost anonymous gaming tool to a worldwide famous communication platform, Slack came a long way in just a little over six years. Nowadays, almost everyone knows what Slack Technologies is.
The chances are, you probably even have it open in another tab while reading this article.
However, not everyone is equally familiar with Slack company’s financial values and its stock market tendencies. It’s the knowledge that could come in handy in various situations, especially for those planning to invest in this public company.
With that in mind, we bring you the best strategies on how to buy slack stock.
But before that, we will discuss:
- Slack Technologies short history and general info
- Slack stock characteristics and performance
- Principle considerations to make before investing in Slack
About the Company
Currently, Slack is one of the leading messaging platforms. It evenly promotes teamwork in both small firms and large corporations. Thanks to it, all work-related communication is much more fluent and smooth, especially when compared to some old-school contact channels, such as email.
The slack stock price is also on a steady rise.
However, all this is only from recently.
Up until 2019, the company operated on a much smaller internal level. And up until 2013, its founder Stewart Butterfield was dedicated only to the improvements of the online game Glitch under the company named Tiny Speck.
In 2013, the first version of Slack was released.
The year 2019 and COVID-19 outbreak brought about many changes, including the stream of remote job positions. But also in the way we had to cope with the newly-formed situation. Slack definitely had a significant role in all this. One crucial thing it did was help us better experience that office vibe from home. But Slack Technologies also thrived in this situation.
That same year the company went public under the WORK ticker symbol at the NYSE exchange.
The new slogan got created — Your work is our work.
The Slack market cap is over $26.5 billion at the moment.
Should You Buy Slack Stock?
But let’s now get to the main point.
Is Slack stock a buy?
To be able to determine this, let’s go over the main pro and against arguments.
Pro arguments for investing in Slack stock
Each public company or corporation has some specific characteristics that attract potential investors. Here are some of the Slack facts and positive trends that could make most investors consider getting a Slack share.
Increasing need for online business communication
Slack revolutionized the way we communicate with our colleagues and supervisors. What is more, it had set correspondence standards we quickly got accustomed to. Not only that, but the demand for this tool keeps increasing daily.
Slack became a norm. Its network keeps spreading, and it has overall great potential. These facts alone could attract many to invest in WORK stock.
But that’s not all.
Improving financial results
Is Slack profitable?
Although the company hasn’t yet reached the profitability stage, its revenue has an increasing tendency. Besides, its losses dropped by 5% between the last quarter of 2020 and the first quarter of 2021.
The first quarter of fiscal 2022, ended April 30, 2021, brought revenue of $273.4 million, an increase of 36% year-over-year. Meanwhile, the operating loss reduced to $55.3 million, or 20.2% of total revenue. That’s a significant improvement compared to the $76.2 million loss recorded in the first quarter of fiscal 2021.
Adding that Slack Technologies exceeded 169,000 paid customers, up 39% year-over-year, we can conclude that the company is moving towards steady earnings growth.
And so, the improvement of the financial results and overall Slack value is reasonable to expect.
Huge takeover potential
Like most social platforms that started small and then skyrocketed, Slack has a great potential of becoming a part of a social network conglomerate such as Facebook, Microsoft, or Google.
This type of acquisition could further increase the demand and value of Slack. That, in turn, could subsequently lead to a WORK stock price increase.
No minimum holding period
Since Slack debuted in a Direct Public Offering (DPO) and not an Initial Public Offering (IPO), there is no 30-day holding period for new investors. That means that you are not in danger of keeping your stocks for too long until they lose value. Instead, you can sell them whenever you feel like it. It gives potential investors some sort of placebo security when considering whether to invest.
Arguments against Slack stock investing
Let’s now check the other side of the Slack medal. Different perspectives matter a lot when investing.
While Slack had innovative ideas and some excellent timings, it’s not the only company of that type and size. It’s also far from being the only corporal connection company in the public market. What is more, the competition keeps rising and surpassing some of Slack’s initial concepts and designs.
In an atmosphere like this, it may be difficult to predict the outcome and put blind trust in the Slack Technologies stock.
Fast cash burn
Another weak point we can’t overlook is the fact that Slack is burning through its cash at a quite high rate. According to Forbes, Slack burned through $97 million in 2018 and over $34 million in the first quarter of 2019.
Such cash burn is expected, especially with growing or start-up companies. It’s how companies drive growth in the first place. However, the rate of cash burn can affect the company’s sustainability in the long run.
Shareholder rights question
One of the biggest reasons for the Slack stock buy or hold dilemma is its shareholder rights confusion.
Slack’s DPO included only the company’s Class A stock. This stock, however, gets only one vote per share. This puts the company’s control in the hands of Class B stockholders, which have ten votes per share.
This situation is not permanent. It will change after ten years of the Slack S-1 filing. Class B stock rights will go back to one vote per share.
Still, until then, many will remain hesitant to buy this stock.
Slack stock performance
Here’s what the most recent Slack stock history can tell us about its performance.
- In the last 52 weeks, the highest value that the Slack stock reached was $45.64.
- The lowest was $24.09.
- As of 21 July 2021, one Slack stock costs $45.20.
- That price has been stable for almost two months now.
- This is also over a 10% price increase from the DPO closing price.
- Slack stock dividend isn’t yet available and is not expected in the next 12 months.
With a -23.43% return on equity and -8.73% return on assets, the company is underperforming. However, one has to take into consideration that Slack Technologies is still under development. And it is still relatively new in the public market.
But, these are all just numbers that may or may not make sense in your portfolio.
Stock performance is a somewhat relative notion. Besides, it can change at any moment.
So, when pondering whether to invest in WORK in the stock market or any other stock for that matter, here’s what you need to consider additionally.
- Does Slack stock complement your portfolio? In other words, will it further diversify and improve it?
- How developed is your portfolio? If you are new at investments, perhaps it’s better to start with some blue-chip stocks. Or, at least, equity that is slightly less volatile.
- What is a wise investment? When buying any single stock, for example, Slack, you should keep its ratio between 3% and 5%. This prevents any stock from seriously disrupting your total returns. Even more so, when the company in question is not yet fully established, and it’s, therefore, riskier.
- Is Slack stock overvalued? Just because Slack is one of the latest hypes, it doesn’t mean it makes a smart investment. Also, think about whether the Slack stock’s value is reasonable or it’s overvalued.
- Learn more about Slack trends and tendencies. You can never be too familiarized with particular equity trends and tendencies. Also, researching more about the field and competitors can be of great help in making estimations. And, at the end of the day, in enhancing your portfolio.
How to Buy Slack Stock?
Luckily, we live in a high-tech society with constant information flow and automatized purchases.
Trading stocks or bonds and monitoring the market, in general, became as accessible as Facebook or your mobile banking app. Besides, everything from findings on best-performing stocks to recent stock market statistics is available on the internet.
So, once you’ve done your research and made up your mind on buying a specific stock, in this case, Slack, the rest of the process is quite simple.
The following are the two most common methods to enter the Slack stock exchange.
Through online brokerages/trading platforms
By far, the most popular, fastest, and easiest way to start trading is through an online brokerage firm or trading platform.
Here is how:
- Choose the broker or trading platform that fits your needs the best — in other words, if you’re a beginner, consider some of the more beginner-friendly options. And if you’re more familiar with the trade, opt for more advanced trading. Trading fees, level of market research, and availability of a Slack stock chart are also relevant factors to consider.
- Create the account — the process of making the account is, most of the time, self-explanatory. Once you visit your brokerage website, you will have the Open Account button you need to press. Fill in the required details, and you’re all set. Confirmation through your email is often needed.
- Deposit some funds in your account — some trading platforms will have the minimum deposit requirements, but most won’t. Still, you will need to have enough funds in your account to start the trade.
- Look up the Slack stock under the Slack ticker NYSE: WORK.
- Select it and proceed with your purchase — congratulations, now you are a Slack stock owner!
Hiring an expert financial advisor
When it comes to Slack stock buy or sell best strategies, hiring a reliable financial advisor could be a game-changer, especially for newbies.
Aside from introducing you to the world of trade and directly helping you conduct the Slack stock purchase or sale, they may additionally provide you with:
- a realistic Slack stock forecast, based both on the latest charts and professional experience
- valuable advice
- repeatedly tested trading tricks and tips
- needed motivation and support
However, keep in mind that this all may come at an added cost.
Slack Technologies has already cleared the path to success with its innovative solutions and clever business strategies.
How long this success is going to last, no one can guarantee.
But one thing is for sure, future Slack investors that spend enough time studying this particular stock and the market in general and that manage to diversify their portfolio have much greater chances of success.
And once you are this type of investor, concerns on how to buy Slack stock or any other specific stock will become a piece of cake for you.
The largest Slack shareholder is The Vanguard Group, Inc., currently holding 7.5%. The following are Daniel Butterfield and Andreessen Horowitz LLC, with 6.9% and 5.5%, respectively.
Most Wall Street research analysts advise against selling Slack stock at the moment. In their professional Slack stock estimates, they suggest that investors should hold their Slack stock.
You can buy Slack stock any time with the help of a trusted brokerage or trading platform.
Although Slack stock is a good stock to buy by most criteria, numerous experts advise future investors to give it some time until the company is better established in the market or at least until it starts making profits. And If you’re interested in the purchase, refer to our How to Buy Slack Stock guide.