Slack IPO on deck, selects NYSE for direct listing
EquityZen co-founder Phil Haslett on the Lyft IPO and the outlook for the IPO market.
One business day after Lyft's IPO, Slack Technologies has selected the New York Stock Exchange for the direct listing of its shares, the second time a major company has picked the exchange to host its unorthodox initial public offering.
The workplace-messaging company is set to follow Spotify Technology SA in debuting on the NYSE through a direct listing, according to people familiar with the matter, after the music streamer’s debut last year went off without a major hitch.
Slack is still in communication with the Securities and Exchange Commission over details on how the listing will work and isn’t expected to go public until June or July.
In a direct listing, a company places its stock on a public exchange without raising any money or using underwriters. The company doesn’t choose the price or who gets to buy in the night before trading begins—as is the case in a traditional IPO. Direct listings are rare, as companies typically seek to raise money when they go public. But now that two major issuers have opted for them, more cash-rich Silicon Valley startups are likely to at least consider following suit.
Slack was last valued privately at more than $7 billion, while Spotify’s market value now stands at about $25 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LYFT | LYFT INC. | 16.30 | -0.07 | -0.43% |
| NDAQ | NASDAQ INC. | 60.08 | -0.04 | -0.07% |
| ICE | INTERCONTINENTAL EXCHANGE INC. | 130.78 | -0.92 | -0.70% |
The choice is a coup for NYSE, which battles rival Nasdaq for the biggest stock listings in the U.S. While Nasdaq won the listing of Lyft Inc., whose highly anticipated shares made its debut last Friday, NYSE has since secured Uber Technologies Inc., Pinterest Inc. and now Slack.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GS | THE GOLDMAN SACHS GROUP INC. | 430.81 | +3.24 | +0.76% |
| MS | MORGAN STANLEY | 92.12 | +0.14 | +0.15% |
The Slack listing is less of a win for Wall Street firms generally, which rake in tidy sums every year in underwriting fees. Still, they’re likely to have a banner year in 2019 as a flood of technology companies are planning to go public using the traditional IPO route.
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Slack is working with Goldman Sachs Group Inc., Morgan Stanley and Allen & Co. The trio were the advisers on Spotify’s direct listing.
Slack operates an app used for group communication and, as of earlier this year, had more than 10 million daily active users and 85,000 paid customers. The company has raised more than $1 billion since it launched in 2013 at increasingly higher valuations and still has ample cash on its balance sheet, according to people familiar with the company. In August, Slack raised $427 million in a funding round led by Dragoneer Investment Group and General Atlantic, valuing the company at $7.1 billion. That came after it raised money from SoftBank Group in 2017.