Slack Technologies Inc, the popular cloud-based collaboration platform for the workplace, is set to go public on the New York Stock Exchange under the ticker symbol WORK. However, unlike other multibillion-dollar initial public offerings this year from Uber and Lyft, Slack is doing it differently by doing a direct listing - which has investors very excited.
Let's take a look at Slack's direct listing - set for 20 June 2019 - in more detail, what it means for the future of the company and how you could take advantage of Slack's public offering through Admiral Markets.
Who is Slack?
Slack is an American software company founded in 2009 which offers cloud-based workplace collaboration tools and online services. The company boasts over 10 million daily active users on its platform with over one billion messages and 50 million hours worth of communication logged every single week. Many innovative and modern companies use Slack such as Trivago, the BBC, IBM and YES! - also Admiral Markets!
Why is Slack doing a direct listing?
Traditionally, companies - such as Uber and Lyft - hire investment banks to manage the process of going public through an initial public offering (IPO). In this instance, millions of dollars would be paid to investment bankers and underwriters to estimate the demand of shares to sell, manage the offering and pricing as well as the overall listing process.
However, Slack is doing a direct listing which means they will not be using an investment bank for an IPO, or issue new shares. In fact, if you decide to buy shares in Slack you will be purchasing existing shares directly from company shareholders and early investors. In essence, pure supply and demand will determine Slack's trading price which is being overseen by market maker Citadel Securities LLC with Morgan Stanley acting as an adviser.
A direct listing is not typical for companies going public but it has been done before by Spotify who listed their shares directly on the New York Stock Exchange in 2018. While the launch may be slightly different, the investor's decision on whether to invest should still focus on the company's long-term fundamentals.
What are Slack's financials like?
Having as much data and information as possible is always useful in making a decision to invest or not. Here's what we know so far regarding Slack's financials from their S-1 filing form with the U.S Securities and Exchange Commission (SEC):
- Over 95,000 organisations pay to use Slack.
- The 575 biggest customers contributed 40% of total revenue for the last fiscal year ending 31 January 2019.
- Over 500,000 organisations are on a free subscription plan.
- $400.6 million in revenue made in the last fiscal year.
- Revenue is up by 82% from the prior fiscal year.
- Slack lost $140.7 million in its last fiscal year, versus $181 million in the prior year.
How to Invest in Slack
The company is expecting to be valued anywhere between $16 billion to $17 billion when shares of the company go public putting the potential price of the company between $25 and $28. However, as it is a direct listing the share price could be quite volatile when it first opens for trading.
Taking a long term view, as other institutional investors are, is essential when deciding whether or not to invest in Slack. Through Admiral.Invest, you will shortly be able to invest in Slack shares after the initial volatility has settled. You can also enjoy other benefits such as:
- Invest in thousands of stocks and ETFs from 15 of the largest stock exchanges in the world.
- Open an account with a minimum deposit of just €1 and invest from just $0.01 per share with minimum transaction fees of just $1 on US stocks.
- Receive free real-time market data, with no delays, at no extra cost.
- Create a stream of passive income by collecting dividend payouts.
- Use the world-renowned MetaTrader 5 multi-asset class trading platform.
Slack's direct listing is gathering a huge amount of attention from all around the world as another multibillion-dollar company goes public this year. Its shares will be available to invest in shortly. In the meantime, click on the banner below so you can learn more about the benefits of an Admiral.Invest account so you can be prepared:
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