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Slack Is Going Public Without an IPO – How a Direct Listing Works

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Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#21

Post by tylerapplebaum »

FartyMcFarter wrote: post #5
nodesocket wrote: post #4

Earlier quoted context omitted.

Sure it's up 50% from the "reference price", but publicly for you and me retail investors we had NO chance at that gain. You'd have been super lucky to get some shares at where it opened at $38.88 (12:08 EST). It immediately shot up to daily high of $41.95 which is most likely where retail trades would have executed at (assuming you used a market order, which you never should). Always buy with limit orders. See the f…

> assuming you used a market order, which you never should). Yeah I don't get why market orders even exist . If you're doing something that usually costs thousands to millions, is it ever a meaningful benefit to saving a click or two and a few keystrokes? If my broker had an option to remove my ability to do market orders (sell or buy) I would immediately enable that.

> Yeah I don't get why market orders even exist.

Have you ever needed to exit a trade in a hurry? Or been buying something on the way up?

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#22

Post by css »

pimlottc wrote: post #19

> The ticker symbol? WORK. I’m curious how symbols are assigned. Most companies have symbols that are similar to their names. Can companies just choose anything they want? Or do you have to be a big player with connections to score a vanity symbol like this one?

They're totally arbitrary. Here is a PDF with the actual rules: https://www.theocc.com/components/docs/clearing/services/nms...

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#23

Post by busymom0 »

pimlottc wrote: post #19

> The ticker symbol? WORK. I’m curious how symbols are assigned. Most companies have symbols that are similar to their names. Can companies just choose anything they want? Or do you have to be a big player with connections to score a vanity symbol like this one?

https://slate.com/news-and-politics/2003/09/how-do-companies...

> “The ball’s pretty much in the company’s court, as long as its choice isn’t already in use and won’t offend anyone’s delicate sensibilities. The NYSE requires that companies submit their symbol requests at least 20 days before they mail out notification to shareholders and that they list a first, second, and third choice. The exchange rarely gives a thumbs-down to the preferred option. One notable rejection occurred in 1992 and involved Furr’s/Bishop’s Inc., a Texas-based cafeteria operator that wanted to disassociate itself from its floundering holding company, Cavalcade Holdings Inc. But the NYSE denied the company’s application for the symbol FBI, on the grounds that it might cause confusion with a well-known law-enforcement agency, and Furr’s/Bishop’s was forced to remain CHI on the board. (The beleaguered company, later delisted from the NYSE, eventually changed its name to Furr’s Restaurant Group—FRRG on the ignominious pink sheets—and has since filed for bankruptcy.)

Some companies select cheeky symbols, rather than mere acronyms. The father of the trend may be Southwest Airlines, which was first listed as LUV in 1971—a nod to its origins at Dallas’ Love Field. Other semi-clever tags include BID for auctioneer Sotheby’s, FUN for amusement park operator Cedar Fair, and BUNZ for deli chain Schlotzsky’s. It’s a lot easier to come up with something witty if you’re listed on the Nasdaq, as that exchange allows symbols to be up to five letters long; the NYSE sticks with a 3-letter limit.”

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#24

Post by mlthoughts2018 »

lotsofpulp wrote: post #12
youeseh wrote: post #7

I know this is an apples and oranges comparison, but I just find it fascinating how value is derived in society. The current stock price, Slack's market cap is half of Tesla's. And, a lot of people think that Tesla is overvalued.

The current stock price is the value of one stock, selling on a specific date, at a specific time, with a specific number of shares outstanding, at a certain trade volume, as compared to other options one can purchase in the market. Multiplying that stock price by the number of outstanding shares provides a number known as market capitalization, but it is not THE value that an organization provides to society.

That’s a bit disingenuous. Efficient market theory gives clear reasons to believe that rational investors would produce a market valuation of the stock, based on net present value of future income streams, that reflects marginal utility in putting a dollar into the stock vs not.

Obviously, rational & efficient market behavior breaks down in reality. But tell me, how does it break down exactly? What alternative measurement of intrinsic value is better, and in what sense?

If you have special knowledge of what subjective / behavioral differences current trading patterns exhibit in contrast to rational or efficient behavior, then by all means share it, or make trading decisions with it, because it means you can measure / predict something pretty much no one else can.

But if you don’t have that special knowledge, then how exactly can you know the prevailing market prices are not actually reflecting intrinsic value?

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#25

Post by busymom0 »

youeseh wrote: post #7

I know this is an apples and oranges comparison, but I just find it fascinating how value is derived in society. The current stock price, Slack's market cap is half of Tesla's. And, a lot of people think that Tesla is overvalued.

Another comparison is Uber vs Tesla where Uber is valued at 80 whereas Tesla at 40B.

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#26

Post by mlthoughts2018 »

patmcc wrote: post #8
ineedasername wrote: post #6

Earlier quoted context omitted.

Would you mind explaining the difference between a market order & a limit order?

A market order is "I want to buy 10 units, no matter what the market price is" and a limit order is "I want to buy 10 units at a price no more than $50" or whatever.

For retail investors in a situation like this, it probably doesn’t matter. You would create a buy limit order at a price somewhere high enough that it’s likely to execute no matter what the price is doing, so the effect is basically the same as a market order.

The advice to generally use limit orders is good though. Rarely would a retail investor need a market order.

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#27

Post by deanmoriarty »

FartyMcFarter wrote: post #5
nodesocket wrote: post #4

Earlier quoted context omitted.

Sure it's up 50% from the "reference price", but publicly for you and me retail investors we had NO chance at that gain. You'd have been super lucky to get some shares at where it opened at $38.88 (12:08 EST). It immediately shot up to daily high of $41.95 which is most likely where retail trades would have executed at (assuming you used a market order, which you never should). Always buy with limit orders. See the f…

> assuming you used a market order, which you never should). Yeah I don't get why market orders even exist . If you're doing something that usually costs thousands to millions, is it ever a meaningful benefit to saving a click or two and a few keystrokes? If my broker had an option to remove my ability to do market orders (sell or buy) I would immediately enable that.

I have traded literally several million of dollars (especially counting all the tax loss harvesting I’ve done) over the years as a private investors in highly liquid index funds, and always use market orders. I don’t think I’ve ever been shortchanged...

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#28

Post by AznHisoka »

satya71 wrote: post #3

50% pop, not bad. Underwriters got $0 of that pop, very nice for whoever pounced early.

Anyone proclaiming it was a 50% pop is misleading. The opening price was around $39 so it essentially finished flat for the day.

The “reference price” is meaningless because it meant absolutely nothing. It wasnt the price it opened at. So why should we base the % change from that imaginary price. And this is was a direct listing so not even an underwriter got a 50% pop.

The media just wants to make things sound more impressive than it really are.

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#29

Post by ericabiz »

nodesocket wrote: post #4
satya71 wrote: post #3

50% pop, not bad. Underwriters got $0 of that pop, very nice for whoever pounced early.

Sure it's up 50% from the "reference price", but publicly for you and me retail investors we had NO chance at that gain. You'd have been super lucky to get some shares at where it opened at $38.88 (12:08 EST). It immediately shot up to daily high of $41.95 which is most likely where retail trades would have executed at (assuming you used a market order, which you never should). Always buy with limit orders. See the f…

I set a buy order yesterday through Schwab and got a notification today that it executed at $38.50, which as far as I can tell was the retail opening price. It executed at 12:08 Eastern.

Re: Slack Is Going Public Without an IPO – How a Direct Listing Works

#30

Post by dannyw »

mlthoughts2018 wrote: post #26
patmcc wrote: post #8

Earlier quoted context omitted.

A market order is "I want to buy 10 units, no matter what the market price is" and a limit order is "I want to buy 10 units at a price no more than $50" or whatever.

For retail investors in a situation like this, it probably doesn’t matter. You would create a buy limit order at a price somewhere high enough that it’s likely to execute no matter what the price is doing, so the effect is basically the same as a market order. The advice to generally use limit orders is good though. Rarely would a retail investor need a market order.

All retail brokerages, and even many professional brokerages send market orders as limit orders anyway. No one wants 100% slippage.
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