“Business software companies have a much better business model than something like Spotify. Spotify’s lackluster trading history may be more due to the fact that Apple has stepped up its streaming efforts to take on Spotify more directly - and not because Spotify listed shares directly as opposed to an IPO. Meanwhile, the Nasdaq is up 15% during the same time frame and rival Apple (SPOT) are pretty much flat since they began trading on the NYSE in April 2018. So is Slack, which is set to be valued at about $17 billion once it begins trading, making a mistake with a direct listing? The last major company that went public this way - Spotify - has underperformed so far as a public company. Newly public companies also tend to get praised by the analysts at the investment banks that helped them debut on Wall Street. The post IPO Success Makes Slack Stock A Gamble, Not An Investment appeared first on InvestorPlace.These companies could save the IPO marketīankers can help drum up support for a company with larger mutual funds as well as average investors. The 7 Best Dow Jones Stocks to Buy for the Rest of 2019ħ S&P 500 Stocks to Buy With Little Debt and Lots of Profits You can follow Will on Twitter at More From InvestorPlaceĤ Top American Penny Pot Stocks (Buy Before June 21) However, one should buy this stock with the gambling money they were going to take to Vegas, not one’s retirement funds.Īs of this writing, Will Healy did not hold a position in any of the aforementioned stocks. If one wants to buy Slack stock, the initial move higher could justify a speculative bet. Each of these tech giants holds enough cash to compete more aggressively for Slack’s customers if they so choose. Even more unsettling, both Microsoft and Facebook also compete in this business. Unfortunately, it could also suffer later if traders begin to seriously ponder the company’s future.Įven with massive revenue growth and market leadership, losses could eventually undermine Slack stock. The massive spike in Slack stock bodes well for the future of the equity. If either of them chooses to compete aggressively, it could have devastating consequences for Slack stock.ħ Stocks Flashing Signs of Strong Insider BuyingĪlthough the performance of WORK on the first day could add to the speculation, internal and external threats could undermine this company in the future. However, Microsoft and Facebook earn profits and hold billions in cash. Moreover, the dominant player in personal chat, Facebook (NASDAQ: FB), has operated Facebook Workplace since 2016.Ĭurrently, Slack holds an edge with more than 500,000 making use of its tools. About 200,000 organizations use this tool. Microsoft (NASDAQ: MSFT) introduced Microsoft Teams last year. However, that comes in almost 20 times higher than the S&P 500 average of 2.2. That does not match the levels of BYND stock or many of the cannabis equities. For one, the spike higher from the first day of trading took the price to about 43 times sales. Although the first-day performance likely surpassed his predictions, he may have a point as the stock carries a great deal of risk. However, our own Will Ashworth seemed underwhelmed with both the direct listing strategy and Slack stock itself. As such, investors could profit handsomely from a speculative bet on WORK stock. It could follow in the footsteps of Beyond Meat (NASDAQ: BYND), a recent IPO that rose more than eightfold from its IPO price at its peak. Given the initial move higher, I see some potential for short-term stock gains. With the massive rise in WORK stock on the first day, the direct selling strategy did not hurt them. Slack Holds Potential for High-Risk Gains Spotify (NYSE: SPOT) also listed their shares this way and enjoyed some initial success.ġ0 Monthly Dividend Stocks to Buy to Pay the Bills Slack offered its stock to the public in a direct listing, selling shares directly to investors rather than using a pricier investment bank. The company also took a unique route to get Slack stock listed. InvestorPlace - Stock Market News, Stock Advice & Trading Tips By the end of Thursday trading, the market cap rose to $19.47 billion. Investors quickly bid prices higher on the San Francisco-based corporate messaging company, which set its IPO price at $26 per share. Slack stock shot upward by more than 48.5% in Thursday trading. Given the obstacles faced by Slack stock, investors should look at WORK stock as a speculative bet rather than as an investment. Still, despite this massive upward spike, the company must cope with financial losses and much larger competitors that could derail the IPO’s initial success. IPO Success Makes Slack Stock A Gamble, Not An Investment
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