SLACK DIRECT LISTING TODAY – By Todd Horwitz, Bubba Trading

 


Slack Stock to Open Thursday 

Slack Technologies Inc. is set to make its trading debut Thursday on the New York Stock Exchange with a valuation of about $15.7 billion, the second major company to go public through a so-called direct listing.

The workplace-messaging company’s valuation is based on a reference price of $26 set Wednesday. Slack’s stock is expected to open significantly higher than this reference price, people familiar with the offering said. 

In a direct listing, a company simply floats its existing stock onto a public exchange without raising any money or using underwriters. The company doesn’t choose an IPO price or who gets to buy in the night before trading begins, as is the case in a traditional IPO. Spotify Technology SA, which made its trading debut in April 2018, is the only other major company to go public via direct listing.

Forrester analyst Michael Facemire says it’s hard for people to understand why the platform is more useful than other chat applications without trying it for themselves. With Microsoft Teams as a major competitor, Slack is facing pressure to distinguish itself in the market.

“If the world were only composed of technologists and developers and Silicon Valley illuminati, then Slack would be far, far ahead,” Facemire says. “There is a large percentage of the population that isn’t that. This is where tools like Microsoft Teams do just as well.

“Slack’s decision to begin trading as a direct listing follows a wobbly start for Uber, which has had one of the most anticipated initial public offerings in the tech sector. Last month, the ride-hailing company reported a $1 billion loss in its first public financial report, just weeks after its IPO.

Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets and Political Commentary
 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.