The U.S. Department of Justice requested more information regarding a merger with Salesforce.com (CRM)
The shares of Slack Technologies Inc (NYSE:WORK) are down 2.6% at $43.13 this morning, despite headlines that Adage Capital Partners is taking stake in the business communication platform. What's hurting the company instead, is the additional request for information from the antitrust division of the U.S. Department of Justice, which is investigating a $27.7 billion merger with software concern Salesforce.com (CRM). Nevertheless, the major deal is still expected to be completed by the end of July.
On the charts, Slack Technologies stock just broke through overhead pressure at the $44 mark, to score a Feb. 16, all-time high of $44.56. An impressive November bull gap helped the equity to these record levels, which stand in stark comparison to a March 16, all-time low of $15.10. Prices have nearly tripled from that bottom, and year-over-year the security sports a 56.9% lead.
Despite the positive price action, the brokerage bunch is still skeptical of WORK. Of the 17 analysts in coverage, 15 carry a tepid "hold" rating, leaving ample room for upgrades. The same can be said for short sellers, which have been piling on the security as of late. The 41.51 million shares sold short make up a whopping 21.4% of the stock's available float.
The options pits lean significantly more bullish, with calls popular. This is per the equity's 10-day call/put volume ratio of 7.47 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 85% of readings from the past year. This means calls are being picked up at a faster-than-usual pace.
Lastly, WORK options can be bought at a discount at this time. The stock's Schaeffer's Volatility Index (SVI) of 35% stands higher than just 9% of all other readings in its annual range, suggesting options players are pricing in relatively low volatility expectations right now.