Slack to go public with direct stock listing

The San Francisco-based startup plans to follow Spotify's lead and raise capital through a direct stock listing on the New York Stock Exchange

2Apr

Slack Technologies is making plans to list on the New York Stock Exchange (NYSE) in June or July 2019, a person familiar with the matter told The Wall Street Journal (WSJ) on Monday. The report also suggested that the workplace messaging startup was hoping to opt for a direct stock listing, as opposed to raising capital through a traditional initial public offering (IPO), as Spotify Technology SA has done.

The San Francisco-based company has chosen to follow Spotify's lead "after the music streamer's listing last year went off without a major hitch", according to the WSJ. A direct stock listing would mean the company would be able to list without actually selling shares, guarantee liquidity, ensure that there is equal access to any interested buyers – not just bankers – and would allow Slack to be more transparent.

It also means that the company can let the public decide what the company is worth rather than bankers, hoping, as Spotify put it when it made the leap, "the wisdom of crowds trumps expert intervention".

Unlike the Nasdaq, the NYSE provides some stability, as market makers on the floor of the exchange have the ability to manage prices if stock becomes particularly volatile on its first day of trading, the WSJ noted.

The firm is one of several enormously high-value startups tipped to go public this year, with Uber and Pinterest both hotly anticipated to follow Slack's lead over the next few months. Last week, Lyft became the latest large startup to go to IPO with a value of $20bn and shares priced at $72 each.

Slack, which was founded in 2009, was valued at $7.1bn by private investors last year. 

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