Messaging platform Slack Technologies Inc. is expected to offer shares to investors in a direct listing this year, instead of pursuing the traditional route of an initial public offering, according to persons close to the matter.
The company has widely been rumored to be considering an IPO for some time, though a direct listing arrangement in which current investors have the ability to sell to new shareholders at a price based on supply and demand, may be more beneficial for current investors and large potential buyers, as fees are often less onerous and shares are often more accurately priced from the start.
The company has previously raised money at a $7-billion U.S. valuation, and could fetch 11 figures by mid-year, when Slack is expected to launch its direct offering. One of the most highly touted offerings in quite some time, investor interest in this direct listing is expected to be intense, fueling speculation about just how high of a valuation Slack investors will receive on listing day.
Another notable recent direct listing was Spotify Technology SA (NYSE:SPOT), which has sputtered since its listing less than a year ago.
Whichever means Slack uses to officially sell equity to the eager public, I believe investor response is likely to be overwhelmingly positive, at least in the short run. For long-term investors, seeing a few year's worth of financial data roll through before making an investment decision may be prudent; for those aggressive return-seekers out there, this may be the opportunity you have been looking for!
Invest wisely, my friends.
