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

fortune.com

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

#61

Post by erik_seaberg »

btown wrote: post #17
opportune wrote: post #15

Earlier quoted context omitted.

Per user it is probably a few pennies per month if they are smart about it. Which is basically nothing as a percent of a single unit sale (subscribing user) compared to the marginal cost of selling cars

Since they need infinite storage even for non-paying users in case they pay for full historical search (though this can be on Glacier or some other type of archival storage), it's probably more than a few pennies, but your point is still entirely valid.

Heh. If you do nothing but type at 216 wpm for 16 hours/day, you might generate 430 MB, which would cost $0.02/year to store on Glacier.

That's before compression.

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

#62

Post by mruts »

b_tterc_p wrote: post #33
mlthoughts2018 wrote: post #24

Earlier quoted context omitted.

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 measur…

you can suggest that true stock values are both unknowable and that the market is a weak approximation at the same time. Requiring one to know the true answer to challenge the status quo isn’t all that different from poor religious reasonings. The stock market exhibits massive changes without much new information except information about the actions of other investors. You can similarly believe something is basically…

The market incorporates information into the price, not the other way around. Or in other words the price is the total aggregate of the information.

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

#65

Post by mruts »

georgeecollins wrote: post #10
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.

It is really hard to make a financial argument for the value of a stock that makes no profits and is has a low to negative book value. Clearly there are valuable companies in this category such as Amazon and Facebook early in their days as public companies. But trying to figure out what they might be worth someday is an exercise in predicting what the future of the world might be. It is not like making a calculation…

Hypothetically, a companies value should be a sum of it’s expected infinite cash flows divided by the discount rate.

If a company lost $10 one year, $5 another, and broke even the third a guess of making money the fourth year is probably more reasonable than a guess of making the average, even with a marginal book value.

Therefore, I don’t think it’s that surprising that companies losing money are still worth a lot.

This isn’t always a reasonable way to think of things, though. It’s important to consider the actual realities of the business. For Slack, I think it’s largely fine. There really shouldn’t be a hard constraint preventing them from making shit tons of money.

Uber and Lyft are a different story. I have a hard time imagining a situation in which those companies will ever be profitable, even with self-driving cars, save one buying out the other.

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

#66

Post by adventured »

Zarathustra_ wrote: post #54
asr wrote: post #50

Earlier quoted context omitted.

Normally the point of an IPO is to raise cash.

No, it used to be the point. Now a large portion of the point is to cash out existing investors. I do not claim it is the sole purpose, and this is largely true among unicorns, but it is certainly a shift. Look at Facebook: they kept raising huge series of private equity.

That is only true with a very small, very richly valued group of technology stocks. You're talking about a few dozen companies max per year. Using that small group to extrapolate a claim that therefore IPOs are now primarily used to exit shareholders, is clearly a dramatic overreach.

Pharma & biotech companies as one example (the market has seen far more IPOs in that sector over the last year than it has large tech companies using their IPO as an exit), are still very frequently doing IPOs so they can raise operational cash to burn and to use their public stock for funding and acquisitions later.

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

#67

Post by track_me_now »

coredog64 wrote: post #59
supremerumham wrote: post #37

Earlier quoted context omitted.

Another example of a name and symbol being different is Salesforce with a symbol of CRM

Sun changed their identifier from SUNW to JAVA near the end.

I submit that the all-time winner is Sleep Country Canada with the ticker symbol ZZZ

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

#68

Post by track_me_now »

kurthr wrote: post #52
chrisco255 wrote: post #51

Earlier quoted context omitted.

1000 employees generating close to $1 billion in revenue. That's why software devs make the big bucks: economies of scale.

Pfftht... only a million $ in revenue per employee? That's hardware level ROI. Software can be a lot more!

valve @ $2M per employee was always considered about the best you can do, long term, at scale.

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

#69

Post by kgwgk »

ars wrote: post #56
FartyMcFarter wrote: post #5

Earlier quoted context omitted.

> 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.

If you do a limit order that is higher than the current market order, you stand a pretty decent chance of executing at that price rather than at the more beneficial market price. Market order just means sell it at what it's worth right now.

I’m sure there may be “failures” sometimes, but shouldn’t in principle the transaction be done at the NBBO?

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

#70

Post by xmprt »

busymom0 wrote: post #23
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 th…

This is an old article so I'm not sure the NYSE 3-letter limit is still in place anymore because UBER recently IPOed with a 4-letter symbol.
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