Slack Technologies stock price has surged by 48.5% at the end of the first day of trading. It started trading on the New York Stock Exchange under the direct listing. It’s the second major company that got directly listed on the stock exchange after Spotify did in April 2018.
Following the footsteps, Airbnb is also planning to go through a direct listing rather than public listing but none of the decision is not finalized yet.
Slack’s reference IPO stock price was $26 but many of the analysts had speculated that it will pop up on its first day of trading. The stock is under the name “WORK” and opened at $38.50 nearly 50$ above the reference line. This has popped up the company’s market valuation by almost $4 Billion which is now $19.5 Billion. The technology-based company is now a part of a slew of tech companies such as Uber, Lyft, Pinterest, Zoom, PagerDuty, and Crowdstrike who went public this year.
Under the direct listing, there is no underwriter for the IPO, no new shares are sold, and the company doesn’t receive any extra funds to operate the company. Slack already have $800 Million in cash so it doesn’t need any extra money for operations. While it has no underwriters it has been engaged with Goldman Sachs, Morgan Stanley, and Allen & Company as financial advisors.
According to Slack, CEO Stewart Butterfield owns 8.6% stake of the company, Accel is the company’s largest shareholder at 24%, followed by Andreessen Horowitz with a 13.3% stake, Social Capital at 10.2%, and SoftBank with 7.3% stake in the company. The company reported a loss of nearly $140 Million on revenue of $400 Million last year. The CEO says that the company has 10 Million active users and its paid customers have increased by 49% year over year.
In late 2018, Slack raised funding of around $400 Million, growing it a valuation of $7.1 Billion.