Shares of Slack Technologies rallied by as much as 21 percent early Monday after IBM said it will deploy the messaging app to its 350,000 workforce around the world.
If the company maintains its solid intraday high, it would mark the most impressive session since the instant-messaging platform's debut as a listed firm on June 20.
Its contract with tech solutions giant ,IBM hinges on the two firms' relationship. At least, some staff of IBM have been using the Slack app since 2014, and the firm struck a cooperation with the messaging tool in 2016, reports disclosed.
But late last year, IBM decided to go all exclusive with Slack, making it the app's biggest client to date. Representatives of IBM and Slack did not respond immediately to a request for comment from Market Watch.
In a filing with the Securities and Exchange Commission, Wellington Group Holdings LLP also reported that it owned 31.5 million shares, or 10.8 percent of outstanding Slack stock, sufficient to make Wellington the second largest shareholder, according to FactSet data.
On January 28, with $443.5 billion in equity assets as of September 30, the Boston-based fund announced that it acquired 27.1 million Slack shares, or 9.4 percent of the outstanding shares, to make Wellington the third largest shareholder at the time.
Since Slack came to the public last summer via a direct listing, there was worry about pressure from Google's Alphabet Inc., Microsoft Corp., and other job-communications offers.
Nevertheless, as an analyst argued that the rivalry concerns were "potentially magnified," the company was the target of a positive initiation note from RBC Capital Markets last week. In the last quarter, the company's stock was up 30 percent, as the S&P 500 gained only 8 percent.
The addition of all IBM staff provides Slack a great boost to daily active usage. Slack chief executive officer Stewart Butterfield disclosed that he never thought a company as big as IBM would be interested to use its messaging tool when the operating system was launched.
But as the software was used and enjoyed by IBM staff, it helped Slack grow the company and cater to other bigger consumers.
Slack is rising very quickly. In the third quarter of fiscal 2020, its profits ballooned by over 60 percent. The number of paid clients contributing over $100,000 in annual revenue climbed to 821 by 67 percent year-over-year, with over 100 of these added in the fiscal third quarter only.
Furthermore, the company also emphasized that it has surpassed 50 paid clients, generating more than $1 million in recurring annual revenue.
