Slack wouldn’t intend to take the beaten track to the stock market. The company would like to be listed directly on the stock exchange and if it really does, it will be the second major tech company to follow this route.
That’s what the Wall Street Journal says based on sources within the company. The intention would be to go to the fair during April and June, although a final choice still has to be made. The way Slack wants to go to the fair does not seem to be completely carved in stone yet.
The direct listing seems to be a serious consideration within the company. It is a rather unconventional way to enter the stock market, mainly because it is riskier than a traditional IPO. In the case of a traditional IPO, a company hires a bank to manage the sale and attract investors.
Investors then come on board and can buy shares at a fixed price before the company goes public. In a direct listing that part of the process is skipped and a company simply starts selling its shares on the stock exchange, without an initial price.
So far there is only one large tech company that has taken this route and that is Spotify Technology. That was a great success and saved the company a lot of money. Thanks to a direct IPO, there are no amounts to be paid to the bank. At the same time, it is risky to go directly to the stock exchange, because all logistic processes have to be completed by the company itself and it is immediately subject to the highly volatile stock market.
Slack will probably just want to take the risk. The company was valued at $7.1 billion after its last investment round. It also dominates the team chat market, with more than 500,000 companies as customers and 8 million daily active users. Three million of them have a paid account.
However, the recent volatility of investors could still lead to Slack going for a traditional and safer IPO. Last December it would have hired Goldman Sachs for that purpose.This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.