Slack readies for US$15.7bn float

Slack Technologies Inc is scheduled to begin trading on the New York Stock Exchange on Thursday.

The firm, which offers workplace messaging capabilities, is set to float on the NYSE with its shares priced at US$26 each giving it a predicted market cap of around US$15.7bn.

However, in contrast to initial public offerings (IPOs) from other recent tech floats such as Uber Technologies Inc (NYSE:UBER), Slack has opted for a direct offering on the exchange.

Unlike IPOs, direct offerings mean most existing shareholders in a company will be able to sell their shares directly into the market, as opposed to an IPO where a company will sell new shares.

Going straight to the market also eschews the use of underwriters, thus avoiding fees, and negates the need for lengthy investor roadshows prior to a float where a company tries to attract institutions to its cause.

While direct offerings aren’t as famous as IPOs, music streaming site Spotify Technology (NYSE:SPOT) was one of the first major companies to use the method for its own debut on the NYSE in April.

There are also concerns that give the recent spate of IPO flops such as Uber, rival taxi firm Lyft Inc (NASDAQ:LYFT) and social media site Pinterest Inc (NYSE:PINS), however, Adam Vettese, analyst at trading platform eToro, says that shares in the private market indicated “significant investor interest” in the stock.

“Slack’s unconventional direct listing is a direct appeal to its 10 million users. Investors who use Slack at work will no doubt see its potential”, Vettese said, adding that with seemingly “limitless” scope for further collaboration with company’s like cloud storage group Dropbox Inc (NASDAQ:DBX), Slack’s growth seemed assured in the minds of many investors.

Slack’s shares will trade under the ticket symbol ‘WORK’.

Story by ProactiveInvestors