Software Stock Brushes off Downgrade on Updated Buyout Buzz

Last week, WORK rallied on Salesforce's potential bid for the company

Deputy Editor
Nov 30, 2020 at 9:50 AM
facebook twitter linkedin


The shares of Slack Technologies Inc (NYSE:WORK) are surging, now up 8% at 40.67, brushing off Barclays' downgrade to "equal weight" from "overweight," after a fresh dose of buyout buzz as CNBC suggested its takeover by Salesforce.com (CRM) will be announced tomorrow. Regardless, the brokerage firm sees limited upside for WORK, and if a bid doesn't end up happening, there is a risk for "meaningful downside."

Last week, Slack stock soared 37.6% on the Salesforce.com news, hitting an annual high of $40.99. For the remainder of the week, the equity continued to make a run at these highs, falling just short on Friday, closing the day out with slight losses. Year-to-date, the stock is up 80.9%. 

Despite today's bear note, of the 15 analysts in coverage, nine sport a "buy" or better rating on WORK coming into today. Elsewhere, shorts have been steadily piling on, and short interest accounts for 36.3% of the security's available float, or nearly five days' worth of pent-up buying power.

Lastly, now looks like a decent time to weigh in on Slack stock's next move with options. This is per the security's Schaeffer's Volatility Index (SVI) of 88%, which sits in the 21st percentile of its annual range, which indicates options on WORK are attractively priced.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners