Slack has opted for a direct listing to go public unlike the
traditional initial public offering (IPO) method. A direct offering helps
reduce costs as there are lesser number of banks involved versus an IPO. However,
there is no capital raise in a direct listing, which is a significant advantage
in an IPO.
Slack reported revenues of around $135 million in Q1 2020, reflecting a growth of 67% year-over-year. Net losses widened to about $32 million from nearly $25 million last year. The company had 95,000 paid customers at quarter-end.
Slack has forecasted its revenue growth at 51-53%
year-over-year for the second quarter of 2020 and at 47-50% for fiscal-year 2020.
Like Slack, Spotify too opted for a direct listing when it
went public last year. Spotify had a reference price of $132 and the company is
now trading 11% above its reference price.
Other companies which went public recently include Chewy (NYSE: CHWY) and CrowdStrike (NYSE: CRWD). Chewy’s opening price was $22 and the company is now trading 59% above this number. CrowdStrike opened at $34 and is now trading 126% above that price.