Feb 10, 2020 - Technology

Slack shares whipsaw amid confusion over IBM contract

Photo: Slack

Slack shares soared and trading in the workplace collaboration company was briefly halted on Monday, after a report stating the company had landed IBM as its biggest-ever customer.

Yes, but: The thing is, IBM was already Slack's largest customer and has been for a couple of years. In an SEC filing, Slack said IBM has been adding additional Slack licenses over time and that it is not changing its financial forecast for the current quarter.

IBM's use of Slack began in 2014, with a group of 68 engineers and grew from there. IBM was one of the first users of Slack's Enterprise Grid and had more than 165,000 users by last year. Today it has more than 300,000 users and offers slack to all employees.

Why it matters: Microsoft has been increasingly going after Slack with its Teams product, which it bundles with Office. Slack has been eager to show its chops, especially among larger businesses that Teams isn't yet equipped to handle.

By the numbers: Shares of Slack ended regular trading on Monday at $26.54, up $3.55, or more than 15%. However, the stock fell in after-hours trading after Slack made its SEC filing, changing hands recently at $24.85, down $1.69, or more than 6%.

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Trading halted as U.S. stocks plummet

Traders work the floor of the New York Stock Exchange. Photo: David Dee Delgado/Getty Images

The stock market fell as much as 7% on Monday morning — a decline so steep that trading was halted for 15 minutes.

Why it matters: The massive sell-off points to Wall Street's anxiety about the global economy. The steep declines come as Saudi Arabia launched an oil price war against Russia over the weekend, while the coronavirus outbreak worsened.

Microsoft and other tech firms sound alarm over coronavirus impact

Illustration: Aïda Amer/Axios

More companies are saying publicly that disruptions caused by the coronavirus are hitting their bottom lines. Microsoft warned Wednesday that its personal computing unit, which includes Windows and Surface, will likely miss revenue expectations due to a slower-than-expected return to production after the Lunar New Year.

The big picture: Although Apple was the first big tech company to warn of a financial impact from the outbreak, most industry watchers said they expected the impact to be felt broadly across the industry, which depends heavily on China for manufacturing.

Robinhood reports outage as markets rebound

Photo: Smith Collection/Gado/Getty Images

Robinhood, a free-trading investment management app, said it experienced an outage as U.S. markets opened on Monday, Bloomberg reports.

Why it matters: The outage cut Robinhood users out of Monday morning's stock rebound of more than 2%, the first gain in eight sessions.