Slack Goes Public at $38.50 a Share, Well Above Expectations

Slack began its first day of trading on the New York Stock Exchange Thursday after pursuing a direct listing rather than an initial public offering. The stock, under the symbol “WORK,” surged more than 60% at the start of trading after opening at $38.50. The NYSE set a reference price of $26 the night before.

The pop puts Slack’s market cap at $21 billion. As of April, Slack was valued at…

nearly $17 billion on the secondary market according to Forge Global, which matches private companies and their employees with investors. In its last financing round in 2018, Slack said it raised $427 million, which brought its valuation to $7.1 billion.

Slack is part of a slew of tech companies to go public this year including UberLyftZoomPinterestPagerDuty and CrowdStrike. But it is just the second large tech firm to pursue the unusual direct listing route in the past year and a half. Spotify surprised Wall Street with its decision to list directly onto the New York Stock Exchange last year.

In a direct listing, unlike an IPO, banks do not underwrite the offering, and no new shares are sold, so the company does not receive any additional money for operations. It’s simply a way for existing shareholders to get liquidity by registering their shares for sale on the public market. Plus, Slack doesn’t need to raise more money since it already has more than $800 million in cash on hand. Slack said it engaged Goldman Sachs, Morgan Stanley and Allen & Company as financial advisors and several more firms as associate financial advisors to assist it in the process…

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