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Slack S-1

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211–220 of 469 posts

Re: Slack S-1

#211
post #87

Earlier quoted context omitted.

Well, these guys do have a good way to make money. Enterprise contracts are worth their weight in gold. As you could see from the quote, their revenue has increased more than their losses - which mean that they are on their way to become profitable. Arguably they could be now, if they didn't invest in growth as much.

> their revenue has increased more than their losses But "net loss" already takes revenue into account! "Loss" is not the same thing as "expenses". The revenue increased substantially, but so did expenses , resulting in a slight decrease in loss over the past 3 years. At the current rate, the company would reach break-even profitability around the year 2070.

They're investing in growth. It's unclear if that investment is good or bad, but looking at quarterly accounting numbers won't tell us. All we can see here is that they're investing more than they're making.

If you created a business that simply bought $1M worth of Stocks (e.x. ETFs) and bonds, the first quarter when you made the initial investment you'd show a "loss" of $1m. You might sell those 10 years later for $2m (or maybe the value goes to $0). You wouldn't know if it was a good or bad investment until much later. Seeing a $1M quarterly loss from that first quarter of investing wouldn't give you any insight at all.

To make matters worse here, the way that quarterly accounting works generally hides what are investments and what are actual losses. Some pre-profitable companies do better than others here but it's fairly difficult to understand what parts of spending are investments and what parts are just burning money when looking at quarterly accounting statements.

Re: Slack S-1

#212

Earlier quoted context omitted.

The rules are about what information is disclosed. The difference is that with public companies, there are rules about what actually gets disclosed and how often. That's why the general public is allowed to invest. It's about how much information is available, not what that information actually is. Investors need to determine whether or not they invest. In no world is the SEC's role to determine whether or not a comp…

>In no world is the SEC's role to determine whether or not a company's business strategy qualifies them to go public or not. Profitability is objective...let’s not pretend what I’m suggesting is the SEC subjectively making a decision on a business judgement or business plan. Simply you want to register a security for public offering show a GAAP profit...I understand that’s not “how it works” or I wouldn’t have sugges…

Why shouldn't public investors be allowed to support ventures that won't show a profit for a while? Think drug discovery oil drilling etc.

Re: Slack S-1

#213
post #54
post #14

Earlier quoted context omitted.

But could also be the thing that will make the market crash nobody knows

I can see that happening. Loss making unicorns go public -> investor pressure builds to reach profitability -> none of them can deliver on promises in the short term -> public does not want to own these stocks anymore -> causes a frantic selling spree -> market crashes.

Well, Zoom is already profitable and Slack could easily go profitable.

But yes, the tale is different for AirBnB, Lyft, and Uber.

Re: Slack S-1

#214
post #130

Earlier quoted context omitted.

That's what people said when they were on Hipchat. And every other chat before Slack. Chat is commoditized software at this point.

HipChat was utter crap. At some point things are good enough.

IRC was fine. Really. And the clients didn't chew ram.

Re: Slack S-1

#215
post #11

"Our revenue was $105.2 million, $220.5 million, and $400.6 million in fiscal years 2017, 2018, and 2019, respectively, representing annual growth of 110% and 82%, respectively. Our growth is global with international revenue representing 34%, 34%, and 36% of total revenue in fiscal years 2017, 2018, and 2019, respectively. We continue to invest in growing our business to capitalize on our market opportunity. As a re…

Is there any other industry where a company can go public having lost $500,000,000 over the last 3 years? I get it their “market share” is increasing every year and the loses are staying the same...and even that is not the full picture of a path to profit. But if the company could turn a profit, then why not do it privately, show that and then go public? My guess like Uber and Lyft...they can’t turn a profit, and for…

Put another way, you're suggesting that "public investors shouldn't have access to loss making companies, regardless of growth". That would eliminate not just tech IPOs, but a majority of publicly traded companies period. Only 2700 (out of about 7500) currently make the cut: https://finviz.com/screener.ashx?v=111&f=fa_netmargin_pos&ft...

Like it or not, tolerating losses (preferably to accomplish growth!) has become a critical part of the capital landscape across industries. At least the tech sector is developing better metrics for comparing healthy and unhealthy growth, and generates enough growth (and later margins) to justify the risk in the first place. You'd be really disadvantaging small investors to not let them make the choice to participate at this stage.

Re: Slack S-1

#216
post #135
post #104

Earlier quoted context omitted.

I'd be curious if it's remotely sustainable. We started on Slack ~3 years ago. We're now moving (albeit slowly) to Teams. 18 months from now Slack will be gone entirely. I can't believe we're the only ones. And unlike Dropbox vs. Ondrive, Slack isn't markedly better in any area than Teams from my testing.

Oh no, turn back while you still can. My team is in full revolt due to a company-wide migration from Slack to Teams. Teams is worse in almost every way. We're seeing lots of missing functionality, bizarre UI bugs, random crashes, extremely slow sync, you name it. Teams is in no way a viable replacement for Slack unless your use case is one or two plaintext messages per day.

Yeah, Teams is fine when it works, but it definitely has a lot of syncing issues that seem to last for hours and then magically resolve.

Re: Slack S-1

#217

I've been thinking about venture funding and how companies do not turn a profit while growing. Wouldn't using funding to sell a service/product under the market value be considered anti-competitive? I mean the businesses without funding would have to price their services high enough to turn a profit, while venture-backed businesses do not. Are there not chat services that would have thrived if Slack did not offer one…

It is priced sustainably already. They lose money due to sales and marketing, which they could scale back to operate a profitable business (but grow more slowly).

Re: Slack S-1

#218
post #68

Earlier quoted context omitted.

If you run a company with 1000 employees, that just $100 per seat, that's not that bad. Telephony is usually quite a lot more expensive than that.

And you can make phone calls in Slack. The call quality and experience is pretty solid too.

Better than Skype for Business in my experience. It can even do video calls and screen sharing with the pro version

Re: Slack S-1

#219
post #11

"Our revenue was $105.2 million, $220.5 million, and $400.6 million in fiscal years 2017, 2018, and 2019, respectively, representing annual growth of 110% and 82%, respectively. Our growth is global with international revenue representing 34%, 34%, and 36% of total revenue in fiscal years 2017, 2018, and 2019, respectively. We continue to invest in growing our business to capitalize on our market opportunity. As a re…

Is there any other industry where a company can go public having lost $500,000,000 over the last 3 years? I get it their “market share” is increasing every year and the loses are staying the same...and even that is not the full picture of a path to profit. But if the company could turn a profit, then why not do it privately, show that and then go public? My guess like Uber and Lyft...they can’t turn a profit, and for…

a lot of venture funds have a 10 year timeframe
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