Workplace messaging company Slack saw shares open at $38.50 in their direct offering on Thursday on the New York Stock Exchange. Good news for the company at the closing bell they were still up and ended trading at $38.62 per share. This great start for the company comes after the NYSE set a price reference for shares in the company at $26.00. The reference price that the NYSE issued was not an offering price from investors, instead the reference was there to set a starting point for broker traders to initiate buy-sell orders after Thursday’s opening bell.
Slack’s initial opening on the NYSE was their first public listing, however unlike an IPO the company opted for a direct listing, and did not issue new equity, this meant that employees and other private investors in the company had the stock that they own transferred into publically tradeable shares. This also meant that Slack did not raise any fresh capital ahead of the listing. Directly listing a company has many benefits, however is an unusual way to go public, it is a much more cost efficient way for the company and less dilutive to those who are already holding shares. Most recently we have seen the direct listing approach taken by Spotify in 2018.
Slack saw its opening share price dictating its market cap of $19.4 Billion USD, this based on both their class A and class B shares outstanding, which were listed in an SEC filing on Wednesday. Just last year the company was valued privately at a respectable $7.1 Billion and since their founding in 2009 have raised over $1 Billion USD in private equity funding. This year has seen quite the growth for Slack already with shares being privately traded between $21.00 and $31.50 between February and March.
Slack is a cloud based internet messaging software that targets office workers and companies that use communication. The software allows users to create channels, share files, and chat with other members of their team around the world. The company have said they are planning on becoming the replacement for email messaging. With over 10 million active users daily around the world in 2018 the US Based company boasts that over 50% of their users are active outside of the US. The company offers both a free version of their software which a majority of the 600,000 organizations are using, however the company generates revenue through the relatively small pool of larger organizations that pay high annual fees for the use and licensing of their software.
Alan pierce – AMT Associates