Popular workplace communication platform Slack has begun trading on the New York Stock Exchange as of this morning, but the tech unicorn did not go public in the form of a traditional IPO. Instead, Slack followed in Spotify’s footsteps, which went public last year, and used a direct listing to begin trading shares. By using this method, Slack avoided the cost of hiring advisors and underwriters, and were able to remain more in-control of the suggested stock price.
"There was definitely quite a lot of debate for awhile because it isn't the traditional route," said Cal Henderson, Slack's cofounder and CTO, in an interview. "But we didn't have a need to raise capital. That was the biggest driver."
Before Slack went public, the NYSE set a reference price of $26 a share, which was quickly bumped up to $38.50 a share when the stock market opened today. Since this morning, shares have jumped by 60 per cent, and stocks are now trading at $42 each. Although it is hard to say if the stock price will keep trending upwards, Slack is currently valued at around $23bn.
Since the beginning of the year, multiple tech companies have gone public using IPO’s and seen extremely disappointing results, such as Lyft, followed by Uber. If Slack keeps having a successful stock market debut after using a direct listing, this method may become more and more popular with other companies that plan to begin trading this year.