Slack’s direct listing route on the New York Stock Exchange Thursday may become all the rage among well-capitalized tech unicorns that don’t want to deal with big, fee-seeking investment banks.
The First Trade. “So, this is a new option for them.”
A direct listing allows a company to go public sans underwriters. Rather, shares held by insiders are sold directly to new investors that want to get into the company. Using this process, companies are able to cut out the costs associated with a normal IPO and sidestep (usually) massive swings in their stocks on the first day of trading.
SPOT) in 2018. The networking upstart will list today on the New York Stock Exchange under the ticker symbol “WORK.” To Tuttle’s point, Slack will enter its public life with more than $800 million in cash (thanks to several funding rounds) despite having never been profitable.
With that cash war chest and a CEO like Stewart Butterfield who tends to seek the limelight, it’s not a shocker Slack is doing a direct listing.
“They are independent thinkers [Slack and Spotify management]. They don’t necessarily want to take the path that everybody has taken. They are doing what’s best for their company, customers and shareholders — and that’s why they are taking this approach today,” Tuttle added.
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