Slack Technologies to debut on Wall Street in direct listing at US$26 per share

In a direct listing, there are more risks in terms of share price volatility compared to an IPO as the stocks are more exposed to the open market.

Slack Technologies Source: Bloomberg

Workplace instant messaging app Slack will be making its public debut on the New York Stock Exchange (NYSE) on Thursday (June 20, 2019) at a reference price of US$26 per share, which would value the firm at around US$15.7 billion. The stock will be listed with the symbol WORK.

The latest valuation will price the tech firm's valuation close to its recent private sales, where its stock's valuation was pushed to US$16 billion. Shareholders were said to have sold stock to private buyers earlier this year for shares at a range of US$24 or US$27 per share.

Last year, Slack was valued at US$7.1 billion by private investors.

Instead of an initial public offering (IPO), Slack has opted for a direct listing without doing an additional raise or bringing in underwriters to handle the deal. Music tech firm Spotify also made a direct listing last year, forgoing the more traditional IPO route start-ups tend to take.

The reference price is not the offering price. The opening public price will be determined by buy and sell orders collected by the bourse from broker-dealers ,the NYSE said in a notice early this morning.

In a direct listing, there are more risks in terms of share price volatility compared to an IPO as the stocks have a larger exposure to the open market.

Bumper IPO year for tech stocks

Tech firms are queueing up in line to list in the public market this year, with Wall Street scooping up most of the listings.

From ride-hailing app Lyft’s listing in March, to scrapbook firm Pinterest in April, tech giant Uber in May, even now Chinese ecommerce Alibaba is jumping on the IPO bandwagon to catch the wave.

Alibaba is said to have filed confidentially for a listing in Hong Kong last week and is expected to file for as much as US$20 billion in the new listing. The ecommerce firm already has a listing on the NYSE, where it raised US$25 billion in 2014, chalking up the largest IPO listing in history.


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