Slack shares jump 49.54 pct. on going public without IPO
The logo for software designer Slack Technologies Inc., shares of which started trading on the New York Stock Exchange on June 20, 2019. EFE-EPA/ Justin Lane
Slack Technologies Inc. financial director Allen Shim (l) and CEO Stewart Butterfield (r) await start of trading for software designer Slack Technologies Inc. on the New York Stock Exchange on June 20, 2019. EFE-EPA/ Justin Lane
Traders await the start of trading for software designer Slack Technologies Inc. on the New York Stock Exchange on June 20, 2019. EFE-EPA/ Justin Lane
New York, Jun 20 (efe-epa).- Slack Technologies Inc. on Thursday tried a different approach from other firms wanting to go public by listing its shares directly on the New York Stock Exchange, bypassing the use of an Initial Public Offering.
The price of the shares shot up by more than 50 percent in early trading - shares having first changed hands on the exchange shortly after noon - and ended the day with a 49.54 percent gain at $38.70 after on Wednesday the firm had established an initial price of $26 per share.
The first price quote for Slack shares was $38.50, far above the price set on Wednesday and clear evidence of the marked interest from investors in the company that designs software for workers to chat and collaborate on projects.
At the close of trading, given the $38.70 share price, the company's capitalization stood at $19.5 billion, significantly above what analysts had expected.
Slack comes to the public market 10 years after it was founded in 2009.
In its financial documents filed with the Securities and Exchange Commission, Slack showed net losses of $138.9 million at the close of its fiscal year on Jan. 31, 2019, $2 million less than it had lost in fiscal 2018, on revenue of $400.55 million, which was almost double the $220.5 million it had brought in in revenue the year before.
The firm said it has 10 million active daily users in more than 150 countries and it managed to increase the number of its paying customers by 49 percent during its latest fiscal year compared to the previous year.
Slack is considered to be one of the biggest "unicorns" - as companies with values of $1 billion or more before they publicly list their shares are known - to go public so far this year after Uber and Lyft, and its worldwide value had been estimated at between $16 billion and $17 billion, according to various analysts.
By directly listing its shares on the NYSE, like music-streaming provider Spotify Technology did, Slack avoided having to deal with financial underwriters, among other things.
Company CEO Stewart Butterfield said Thursday that the firm opted to list directly on the exchange because it did not need the cash that an IPO would have provided, given that it has $800 million in liquid cash at present anyway.
"We're not ideological crusaders on this stuff," he said, adding that company leaders also had wanted to avoid the "lockup period," saying that "when the supply (of shares) is so constrained, the psychological impact of that can be a big negative. ... Giving employees the option early is more important."
The San Francisco-based firm's users can share files, build automated workflows, host video calls, poll colleagues, keep a to-do list and perform assorted other tasks, and its biggest competitors include Microsoft, Alphabet and Facebook.