AroniSmartInvest In Action: Slack IPO is Finally Coming

Slack

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Slack Technologies, or just Slack, is the most popular workplace chat platform. It has been on AroniSmartInvest radar
since 2017. On June 15, 2017, AroniSmartInvest in Action Sentiment Analysis flagged Slack as one of the most interesting companies (see the sentiment cloud attached) to watch in upcoming days, and probably months and years (see  the article AroniSmartInvest In Action: Slack? Yes, Slack Technologies of June 15, 2017, here)

 Slack's  Value

Last valued at over $7.1 billion during its August 2018, Slack filed the paperwork on Friday to publicly list its shares, as a Direct public offering (DPO), to avoid the usual Wall Street IPO process.

In its latest valuations, Slack appears worth about $17 billion on secondary-market trades.  Created in 2013, the privately owned and start-up , had become the standard workplace chat platform in major companies, by 2017. It was among the fastest growing tech startups in Silicon Valley. Slick willlist its shares on the New York Stock Exchange under the ticker symbol SK.
In its latest earnings reports, Slack revenues grew from $220.5 million in fiscal year 2018 to $400.6 million in fiscal year 2019., or an increase of 82%. The loss went from $140 million to $138.5, which, as a portion of the revenues, went from 63% in 2018 to 34% in 2019, a significant improvement.

Slack IPO is expected to be successful. Although it is one of the many IPO in 2019, it is also among the most anticipated. (See article,  AroniSmartInvest In Action: IPO season with Soaring IPOs and those to watch, here)

Slack's Strength 

Slack's revenues come from monthly or annual subscriptions. In its report, Slack said that 88,000 of its customers are paying customers, with 575 generating more than $100,000 in recurring yearly revenues, and making up 40% of its business.

Slack, on top of being one of the fast growing startups, is among the most diverse tech companies in Sillicon Valley. According to Slack statistics (see here), 45% of all managers at Slack are women, 4% of the workers are African-American, 19% Asian, 7% Mixed-Race/Other 10.3% , members of the LGBTQ community.

Acquisition Rumors

Rumors of Slack acquisition remain, despite the upcoming IPO.  The latest report on the collaboration between Slack and one of the latest most successful IPO, Zoom, has fueled the rumors.

In late 2016, Microsoft was rumored to be thinking about acquiring Slack. Instead, it launched Teams, a collaborative group-chat service. What happened? Teams has so far failed to catchup for small businesses, freelancers, and agile organizations. Teams was a feature of Microsoft Office, Slack is product with many features.

Stories continue to  spread about an impending $9 billion acquisition of Slack by Amazon. It appears that Amazon CEO Jeff Bezos may have been using Slack in his own companies, including The Washington Post and Amazon. Amazon's Echo home device Alexa, has also Slack integration.

Several Google’s apps integrate with Slack, even though Google has its own Hangouts Chat. Is Google also considering aquiring bith Slack and Zoom? Will MicroSoft let it go? How about Facebook?

All the very interesting questions.

 

 

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