Unlike Alibaba and Facebook, which debuted on the New York Stock Exchange via initial public offering (IPO), Slack went public by way of a direct listing - which may have contributed to a larger opening trade volume.
The so-called direct listing, which differs from a traditional IPO in that it does not raise fresh funds, will put on trial a method pioneered past year by music streaming business Spotify Technology.
Slack's valuation has jumped from about $7 billion in August 2018, when it last raised funds, to around $17 billion, according to Renaissance Capital, which specialises in the IPO market.More news: Horns grow on young peoples’ heads due to gadget use
Slack's direct listing could have implications for other large technology companies such as Airbnb, which is considering going public through a similar approach, a person familiar with the matter said.
The office messaging app, which has been styled as an email-killer, climbed as high as $41.95 a share, against an earlier reference price of $26. Using this process, companies are able to cut out the costs associated with a normal IPO and sidestep (usually) massive swings in their stocks on the first day of trading.
As the New York Times surmises, all the investor enthusiasm for Slack and other smaller tech companies (including SF-based Zoom, whose stock has shot up 59% since its mid-April IPO) has something to do with the scope of their business and their potential for growth.More news: Electric Car The Tesla Pickup Truck Has Arrived
'We think a direct listing is a more effective and efficient way to get to a normalized level of supply and demand without the constraints of an IPO, ' said Allen Shim, Slack's chief financial officer.
"Direct listings are still a pretty new vehicle".
Revenues for the San Francisco-based Slack soared more than 80 percent to $400 million in 2018, but it reported losses from operations of $143.85 million. What the future holds for the now public company remains to be seen but one area in which it has excelled is continually adding more paying customers.More news: OR bear put down after people feed him, take selfies, officials say