Workplace Chat Giant Slack Surges 48% in Historic Direct Listing Debut
Slack bypasses traditional IPO methods to launch directly on the NYSE, seeing its stock jump nearly 50 percent and pushing its market cap past $20 billion.
Slack makes a historic entrance onto the New York Stock Exchange as its stock surges 48.5 percent to close at $38.62 per share. The workplace communication giant chooses a direct listing instead of a traditional initial public offering, allowing it to bypass expensive investment banking fees and roadshows by simply trading existing shares. This successful debut pushes Slack's market capitalization well above $20 billion, which is nearly three times its most recent private valuation of $7 billion.
The massive first-day jump creates several new billionaires and generates enormous returns for early venture capital backers. Co-founder and CEO Stewart Butterfield sees his 8.6 percent stake reach a value of $1.6 billion, while major investors like Accel, Social Capital, and Andreessen Horowitz collectively hold stakes worth billions of dollars. Slack stands as only the second large venture-backed company to utilize this alternative public market path, following the lead of Spotify.
Market analysts point out that Slack's strong opening aligns perfectly with the current Wall Street appetite for enterprise software-as-a-service companies. Other enterprise SaaS offerings that go public in 2019, such as Zoom and PagerDuty, currently trade more than 100 percent above their initial offering prices. While direct listings carry inherent risks due to their unproven nature, Slack leverages its globally recognized brand and the booming SaaS sector to achieve a remarkably smooth and profitable public transition.