Oops! Investors thought Slack was about to announce big news. It was old news
Posted February 11, 2020 10:39 a.m. EST
CNN — Slack investors are apparently so desperate for any good news about the unprofitable company that they pushed the stock sharply higher on a report that turned out to be old news.
Shares of Slack soared more than 15% Monday after Business Insider said in a story that IBM had purchased Slack accounts for all of its 350,000 global employees, making Big Blue Slack's biggest customer.
Slack's stock was halted on the New York Stock Exchange for news shortly before the market closed, furthering speculation that the company was about to officially announce a major partnership with IBM that could boost its sales.
But there was one little problem. IBM was already Slack's biggest customer.
"IBM has been Slack's largest customer for several years and has expanded its usage of Slack over that time," Slack said in a Securities and Exchange Commission filing Monday evening.
The company added in the SEC filing that there was no need to update its financial guidance for the fourth quarter or fiscal year, which ended in January. Shares of Slack fell more than 5% Tuesday as a result.
Solid sales but Slack is still losing money
Slack, which has not announced a date for its earnings release yet, is expected to post a quarterly loss of $31 million, or 5 cents a share. Revenue is expected to rise 43% from a the fourth quarter of 2018 to $174.1 million.
Although Slack's sales gains are impressive, investors are worried about the company's continued losses -- especially as software giant Microsoft increasingly has its sights set on taking down Slack. Microsoft has launched a big splashy ad campaign for its Teams product, a collaborative messaging tool that is similar to Slack.
Microsoft said in November that Teams now has 20 million active users, compared to about 12 million for Slack.
Slack's stock has been extremely volatile since it began trading on the NYSE last June by directly listing existing shares. The company did not raise money through the sale of new shares in a traditional initial public offering.
Shares of Slack are up about 5% from their reference price of $24 on their debut day.
But the stock has plummeted 40% from its peak of $42, which it reached on its first day of trading. Slack, along with fellow unicorns Uber and Lyft, had a tough time convincing skeptical investors that it can be profitable anytime soon.