Slack stock price soared more than 15% in yesterday’s trading session on news reports that International Business Machines Corp. (IBM) would start using Slack’s communications services to more than its 350,000 employees.
However, the company moved quickly and denied such reports, hence erasing around 6% of daily gains in the after-hours trading session.
Fundamental analysis: IBM confusion initiates a roller-coaster ride
Business Insider ran a story yesterday that the tech giant IBM has decided to use Slack’s communication platform to connect all of its 350,000 employees. Understandably, shares of Slack soared higher given the size of IBM and its pulling force.
Accordingly, Slack beat its major rival, Microsoft Teams, to further expand its partnership with the single biggest customer – IBM. The old-fashioned tech giant had been using Slack since early 2014.
According to Konrad Lagarde, the director of productivity and developer tooling at IBM, the company opted for Slack as its employees liked using their platform.
Slack platform allows its users to send one-on-one direct messages, create private group chat rooms, attached files to messages, and integrate with a variety of online third-party apps.
Later in the day, the San Francisco-based communication platform said in a SEC filing that “IBM has been Slack’s largest customer for several years and has expanded its usage of Slack over that time,” practically rebuffing news reports.
In layman terms, Slack says that IBM is already a customer and the decision to expand Slack’s services to all IBM’s employees won’t automatically translate into new licenses for all 350,000 employees.
Technical analysis: A roller-coaster ride
The SEC filing tamped down market’s enthusiasm, which caused the Slack stock price to erase around 6% of its previous gains. Slack stock price currently trades at $24.94 in a premarket trading session, down $1.60 from yesterday’s closing price of $26.54.
As seen in the daily chart above, the price erupted higher to create a massive bullish candle yesterday. Moreover, the move has pushed the price through the previous resistance at $24.28, which now paves the way for a test of higher levels.
Should investors continue to buy Slack stock in the coming days, we may see a test of $28.74, which is a double-bottom target. On the downside, the previous resistance near the $24 mark is supposed to act as a support now.
Shares of Slack soared 15% higher on news that tech giant IBM will use Slack’s communication services for all of its 350,000 employees. Slack denied such reports in a SEC filing later in the day, which caused the stock to lose a portion of the previous gains.