Barclays downgraded the stock to "equal weight" from "overweight"
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.