Business

Slack stocks drop after first results report post IPO

The company's shares went down 16% after the announcement of results

slack's shares drop
  • Slack went public in June in the New York Stock Exchange through a direct listing;
  • Investor’s main concern is if the company can compete against Microsoft Teams.

Team collaboration software Slack has released its first quarterly results as a public company yesterday, Wednesday the 4th. The cloud-based company shared some good news regarding revenues–which climbed up to $ 145 million, reaching 58% more than the revenues for the same period of 2018 and overcoming the $ 140.7 million expected by analysts.

But some not very rosy news also hit the American-based company: net losses were reported at $ 359.6 million, from $ 31.9 million in the same quarter of the previous year. This huge difference in losses is due to the $ 307 million of stock-based compensation and also to the amount of $ 8.2 million of credits Slack had to spend with customers affected by interruptions in the chat service. To solve this problem, the company’s CEO, Stewart Butterfield, claimed to be drawing investment with new hires on infrastructure. 

ALSO READ: Slack goes public and leaves Uber and Lyft behind

Although the company exceeded expectations on revenues, what brought its shares down, decreasing as much as 16% after the results’ announcement, was a big concern for investors: is Slack capable to tackle competition against its major competitor, Microsoft Teams