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URL:  https://boards.fool.com/i-have-purchased-work-on-its-dpo-day-385-i-34255489.aspx

Subject:  Re: Slack Technologies (WORK) Date:  7/21/2019  10:52 PM
Author:  remmdawg Number:  115359 of 115803

I have purchased WORK on its DPO day @ $38.5. I think i got ahead of myself and got excited about all the talks about how users love the platform and how it is more compatible to use with most other cloud companies.
I know i am a new investor and have still so much to learn and at its worst, WORK will be a lesson learned for me.
BUT
I have been looking through Slacks financials and all the numbers provided on June 10th date look good but then i do not know where to look for their numbers before going public, so cannot compare the numbers to their previous years and quarters.
My question to you is:
Have anyone here invested in Slack? What do you make of the company?
I have seen its CEO is selling shares almost daily but considering they do not have a lock up period because of the way they went public, that doesnt concern me much, should it?
Please let me know of your thoughts and views.
Thank you,
Bella


I am in a similar boat. I purchased shares at about $40. I also got ahead of myself after reading all the positive views from users - all the hype. I'm disappointed that I was too hasty in buying a significant position. I have sold about half my position on the way down - I can use the tax loss. After learning more about Slack, I am less bullish than I was originally. Here's the bull and bear theses as I see it:

Bull case:

#1. It has very positive reviews - users seem to love it. It seems to be the best of breed with a better user face than Microsoft's Teams.
#2. It has stickiness - once a company starts using it, it's hard to drop.
#3. As a workplace messaging medium, it might be leveraged profitably in a multitude of ways. Its TAM may be massive.
#4. It is has had exceptional growth - 81% revenue growth last year.


Bear case:

#1. Competition may be a problem - Microsoft's Teams may be a formidable threat and Microsoft has very deep pockets.
#2. It does not really have a moat at this time - despite its stickiness.
#3. Its growth is slowing and is likely to slow to about 50% this year.
#4. It's very richly priced for 50% growth - still trading at an enterprise value of 34 times ttm sales after the drop.


The current price is probably reasonable - at the high end of the private pre-offering price. The CEO sales, while not a great sign, are only a tiny portion of overall Slack stock - and this seems to be typical CEO selling in this situation. As for Microsoft, its product is apparently inferior at this time and its daily active users (DAU's) are likely inflated by automatic logins on Suite. Typically, large companies have difficulty doing many things very well.

I'm not sure whether I will keep my entire position at this time. There doesn't seem to be a catalyst until earnings (almost 7 weeks away) and I might be able to use the tax loss. But I do like the longer term potential and might keep a small position at this point. If it reaches its potential, the buy point won't really matter.

dave
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