No. of Recommendations: 0
Hello All,

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
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No. of Recommendations: 3
Hi Bella

Apart from what has been announced and what was put in the S1 (IPO filing) I haven’t come across more. Maybe Crunchbase has some back data.

I like the company and product but have 2 concerns:

1) it got too highly valued after IPO - it seems to be resolving this with its SP declines though and I watch with interest

2) lack of a competitive Moat. I don’t necessarily worry about Microsoft but to a degree anyone could build a messaging app. Whatsapp for business could be a killer tool or something from Atlassian Etc

This second point I worry about more.

A
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No. of Recommendations: 1
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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No. of Recommendations: 5
Bella says: I know i am a new investor and have still so much to learn

Having the stock price move the "wrong way" immediately after buying is a common experience. It's not unique to IPO s.

You will rather frequently see some investor advising that s/he bought XYZ, therefore, everyone else should expect the price to drop cause her/his action is a contrarian indicator.

I've personally bought or sold and had the stock price move the opposite direction. It's FRUSTRATING!

I've held off buying or selling, "expecting" the price to decrease or increase respectively, only to have it move the "wrong way". It's FRUSTRATING!

Choose good companies, based on fundamentals, then don't stress. Be patient.

I'm mostly LTBH, and my stash has grown even though I've experienced the frustrations.

🙂
ralph
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No. of Recommendations: 3
1) it's routine for small tech companies to have a large number of insider sells between cashing out at IPO and a lot of these companies give options for incentives and retaining employees. I don't even lay attention to it.

2). Slack is a CHAT app. That is getting beat by Teams. What is their next product? Not exactly like they are deeply embedded into an enterprise with a chat app.

3). Their share price is crazy high like all IPOs these days because the market only pays attention to growth and not differentiation or moat.

I never bought WORK but would have sold as soon as I saw how quickly Teams is overtaking them, which I found out a few weeks ago. Not every fast growing IPO is the next big winner. In fact most wont be.
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No. of Recommendations: 5
Having the stock price move the "wrong way" immediately after buying is a common experience. It's not unique to IPO s.

Since short term price moves are essentially random you have close to a 50% chance of the price going down after you buy and a 50% of it going up after you sell.

But there is a compensation, since short term price moves are essentially random you have close to a 50% chance of the price going up after you buy and a 50% of it going down after you sell.

LOL

Denny Schlesinger
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No. of Recommendations: 2
because the market only pays attention to growth and not differentiation or moat.

While I am cautious about ascribing behaviors to the market, it does seem to me that recently high levels of growth are taken as evidence of differentiation or moat when, in fact, no such thing may be the case.
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No. of Recommendations: 1
Slack is a CHAT app. That is getting beat by Teams. What is their next product? Not exactly like they are deeply embedded into an enterprise with a chat app.

My research suggests otherwise. Teams DAU's may be inflated due to automatic logins but without actual use. And the consensus seems to be that Slack is easily the superior product with a better user interface. Okta's CEO suggested (during a discussion of Slack), if I recall correctly, that companies are typically looking for the best in breed for this type of product - which means Slack. Unless the Teams product improves significantly, I would guess that Slack will be the winner. Microsoft is a gorilla but has a lot of balls to keep an eye on.

As for being "embedded," there is some stickiness with Slack and I'm not sure if companies will be quick to change once employees are accustomed to it.

But your concerns are warranted and may outweigh the positives. I share your concerns and I've lowered my position in Slack for this reason.

Dave
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Bella, are you diversified?
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No. of Recommendations: 2
Ant: Somehow I felt much better finding you were also interested in the company, and only had two concerns. lack of moat didn’t stop ZM all as much, or PD maybe WORK can survive, until they find their moat.

Dave: I had all the bull cases in mind, what I missed was the slowing growth. That is a big concern, even though their NRR is very impressive at 137%. Still thinking I will hold to the 100 shares I bought and see where we get from here, or sell some, if there are any appreciation in price.

Ralph says: Choose good companies, based on fundamentals, then don't stress. Be patient.
That is an excellent piece of advise, I will remember.
For the most part, I have been following the stocks discussed on the boards and invested based on the deep dives and recommendations, so I was positive the companies I had invested in were all great companies, well, all but NTNX and GH that did not work well for me and most others. But WORK was not discussed much, I just went based on the hype, not a good strategy for investing. Lessons learned!

12X: Thank you for sharing your views, I agree not every fast growing IPO is a star. Learning fast here.

Captain: Once the downward 50% is achieved repeatedly, one can sit and wash their hands off the market. Hoping that won’t happen tho.

Tamhas: I do agree with your comment, ZM seem to be one of those exceptions

Karen: I have all my investments in SAAS, following the companies discussed here and on Saul’s board, so I could be considered as diversified as most others following these boards. I have seen some big rewards so far. My downfall seems to happen once I go on my own, a sign I need to pay more attention when selecting companies on my own.

Thank you all for responding and helping me with facts and your valued views on WORK.

Bella
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No. of Recommendations: 2
the consensus seems to be that Slack is easily the superior product with a better user interface. Okta's CEO suggested (during a discussion of Slack), if I recall correctly, that companies are typically looking for the best in breed for this type of product - which means Slack. Unless the Teams product improves significantly

Funny how those things work. My engineering team has been using Slack for quite a while. We like it; simple, unobtrusive, does what its supposed to with minimal fuss.

Along comes management and puts the whole company on Teams. Best I can tell, it does everything Slack can do and possibly more. Unfortunately, its clumsy, always in the way, and ridiculously complicated. It also comes for free along with Office 365, so we're stuck with it.

Currently running both apps <sigh>
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No. of Recommendations: 1
Funny how those things work. My engineering team has been using Slack for quite a while. We like it; simple, unobtrusive, does what its supposed to with minimal fuss.

Along comes management and puts the whole company on Teams. Best I can tell, it does everything Slack can do and possibly more. Unfortunately, its clumsy, always in the way, and ridiculously complicated. It also comes for free along with Office 365, so we're stuck with it.

Currently running both apps <sigh>


Interesting. I am in the health care field, a hospital based ER physician. Unfortunately, I am at the mercy of the hospital system which chooses the Electronic Medical Record (EMR) System. Teams sounds similar to the EMR we use. It seems designed to please everybody (billers, government bureaucrats, lawyers, hospital administrators, etc.) other than those who use it. It's designed for optimum inefficiency without the health care provider or patient in mind. So I can empathize with you. And I understand that decision making in organizations is often suboptimal.

It's still too early to tell if Slack will emerge a winner.


FWIW, I just sold out of Slack today on the bounce. I am still interested in Slack but I can use the tax loss after buying higher. I will wait for more clarity and/or a catalyst before buying back in - maybe the next earnings report will provide this one way or the other.
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