Slack’s Stock Pops And Makes CEO A Billionaire In Unusual Market Debut

has fared far better than expectations. However, all of those companies took a different path than Slack by going the usual IPO route.

In its entrance on the New York Stock Exchange, Slack became only the second large company, after music streaming giant Spotify, to carry out a direct listing instead of an IPO. A direct listing means that Slack isn’t issuing any new shares. Instead, current shareholders may trade their shares publicly. This method allows the company to save money by bypassing Wall Street underwriters. But, with no new shares, Slack isn’t raising any funds.

Another caveat of using a direct listing is that Slack stockholders, including employees, are not blocked by lockups as they would normally be in an IPO. Typically, existing shareholders would have to wait 180 days before they can sell their stocks, but Slack’s direct listing involves no such restrictions. Looking forward, the company likely won’t see the post-lockup volatility of a normal IPO, said John Mullins, a London Business School associate professor.

“On day 181 [for an IPO], all those insiders want to start selling to turn that investment into liquidity,” Mullins said. “So at the time that the lock-up expires on a traditional IPO, there's a lot of selling pressure, and typically at that point the stock goes down unless there's something to offset that, like major growth or major new deals. Here, we don't have that risk.”to spurn IPOs as they contemplate the transition into the stock market.

Slack is a pretty cool app!

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stressed-out workers spend $1,500 more on health care each year. Pets, yoga and sleep can change that: Former Aetna CEO Mark BertoliniFormer Aetna CEO Mark Bertolini says that internal data from the health insurance company's own workers showed the most stressed-out employees spent $1,500 a year more in health care. The finding led him to bring yoga, pets and sleep management programs to the company, and he credits the cultural changes in driving a 600% stock gain. At the same time your making millions stressing people out. ThanksObama Aetna's network in Florida sucks! Many MD's don't participate b/c they don't pay like other carriers do. Florida Blue is a close second.
Source: CNBC - 🏆 12. / 72 Read more »

CEO Talks: Pomelo’s David Jou Talks Reinventing the Fast-fashion PlaybookHow the digitally native Southeast Asian company is experimenting with store pickups and why it believes it will transform retail.
Source: wwd - 🏆 24. / 68 Read more »

LinkedIn CEO Jeff Weiner says being a Microsoft executive is 'a dream job'Jeff Weiner told CNBC's Jon Fortt that, about three years after the Microsoft acquisition, he gets to work with 'an extraordinary group of individuals.' working at the apple store is one of my dream jobs. i can see myself really enjoying and loving it.
Source: CNBC - 🏆 12. / 72 Read more »