Why Josh Brown Still Likes Slack

On CNBC's "Closing Bell," Josh Brown revealed why he likes Slack Technologies Inc WORK.

Brown has a long position in the stock and his first purchase was when it was trading much higher. After the stock declined, he decided to buy more at lower prices.

Brown said the stock bounced off its 100-day moving average and there is a "pretty well-established inverse head and shoulders pattern" on its chart. If the stock breaks above $30, which is the neckline of the inverse head and shoulders, Brown said it would be in a good position to move much higher.

He said the stock is expensive and it has always been expensive, but it's a part of the basket of stocks that benefit from the current COVID-19 quarantine situation.

The Microsoft Impact

Slack went from 10 million to 12.5 million daily users and it converts around 16% of free users to paid, Brown said.

He explained that the stock has been under pressure because of the "competition" from Microsoft Teams, but Microsoft Corporation MSFT bundles that with Office 365 and Brown said the uptake is "pretty weak."

"The real issue for Slack is how quickly can it get to profitability and how quickly can it dispel the talk of competition from Microsoft," said Brown.

Slack's stock closed at $28.03 per share, 10.66%.

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