Stock is starting to trade on the New York Stock Exchange
Slack increased more than 56% in debut Thursday on the New York Stock Exchange in a direct listing instead of a first public offering.
The stock, under the symbol WORK, opened at $ 38.50, almost 50% over the reference price of $ 26 set by the NYSE on Wednesday night.
Pope adds Slack's market value of over $ 20 billion. From April, Slack was valued at nearly $ 17 billion in the secondary market, according to Forge Global, which matches private companies and their employees with investors. In its latest funding round in 2018, Slack said it increased $ 427 million, which led to its $ 7.1[ads1] billion worth of valuation.
Slack is part of a number of technical companies that will be public this year, including Uber, Lyft, Zoom, Pinterest, PagerDuty and CrowdStrike. But it's just the other big tech company to pursue the unusual direct listing route in the last 18 months. Spotify surprised Wall Street with its decision to list directly on the New York Stock Exchange last year.
In a direct listing, as opposed to an IPO, the banks do not sign the offer and no new shares are sold, so that the company does not receive any extra money for operations. It is simply a way for existing shareholders to get liquidity by registering their shares for sale on the public market. In addition, Slack does not need to increase more money since it already has more than $ 800 million in cash. Slack said it involved Goldman Sachs, Morgan Stanley and Allen & Company as financial advisors and several companies associated with financial advisors to assist it in the process.
While banks usually help determine prices in a stock exchange listing, the NYSE sets the Slack reference price at $ 26 on Wednesday night. The opening price for Slack's class A share was determined by the purchase and sales orders collected from NYSE from broker dealers, according to Slack's prospectus.
Like many technology companies, Slack debuted with a two-tiered class B share class with 10 votes per share to consolidate voting rights among the top shareholders. According to Slack's prospectus, Accel is the company's largest shareholder of 24%, followed by Andreessen Horowitz with a 13.3% stake and 10.2% social capital. Slack CEO Stewart Butterfield owns a 8.6% stake and SoftBank has 7.3%.
In an interview with CNBC's Andrew Ross Sorkin in front of the stock's debut, Butterfield said that Slack's success outweighs a change to email we know of. Conventional emails will be phased out in five to seven years, he said.
"Everyone wants to choose this," says Butterfield about Slack, which provides a platform for public and private messaging channels.
Slack reported a net loss of $ 138.9 million on revenue of $ 400.55 million for the year ended January 31. .31, said slack that it had over 10 million daily active users and saw that the number of paid customers increased by 49% year on year. Slack has also seen great growth among its highest paying customers, those who pay over $ 100,000 based on annual recurring revenue. The number of customers in this group was 93 per cent year-on-year compared to 2018, according to the prospectus.
Information: Comcast Ventures, the venture capital of Comcast, is an investor in Slack. Comcast owns CNBC parent company NBCUniversal.
-CNBCs Jessica Bursztynsky contributed to this report.
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