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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

#51

Post by chrisco255 »

erikpukinskis wrote: post #36
mfatica wrote: post #16

Earlier quoted context omitted.

If it's a few pennies for month how are their operating expenses greater than their revenue? Have you even looked at their public filing or are you just making assumptions?

Because they’re paying 1000 engineers to shoot for the moon, to justify the next valuation. In a fancy office. To service their order book, they just need a skeleton crew. And the order book should be the bottom line for the bulk of investors.

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

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

#52

Post by kurthr »

chrisco255 wrote: post #51
erikpukinskis wrote: post #36

Earlier quoted context omitted.

Because they’re paying 1000 engineers to shoot for the moon, to justify the next valuation. In a fancy office. To service their order book, they just need a skeleton crew. And the order book should be the bottom line for the bulk of investors.

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!

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

#53

Post by lbotos »

sixhobbits wrote: post #31

> In an IPO, SEC rules typically restrict shareholders from selling shares until six months after the offering. A direct offering makes it much easier for employees and early investors to cash out as soon as the first day of trading. This can be a big help for investors in companies that have waited to go public, which many of the best-known tech companies have been doing for years Is it wrong to interpret this as ot…

My understanding is as follows:

In a traditional IPO, the company finds a bank to underwrite the deal and that bank gets shares. That bank is then taking on the risk of the shares flopping and tries to sell. The SEC rules protect the underwriting bank from competition during that time.

In a direct listing, the shares are coming from the current shareholders, so there is no need to stop competition because there is no third party to compete against.

A Cynic might say the bank expects a bubble 6 mo out, but I'd assume that's either baked into the fees/cost (4-7% as per the article) or they believe the shares of the company will be worth more eventually.

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

#54

Post by Zarathustra_ »

asr wrote: post #50
cdumler wrote: post #35

Earlier quoted context omitted.

That is possible, but in theory there has been due diligence to verify the company as an on-going concern. Normally the goal of going public is to let those who took the risk in the beginning to get a payout, given that they have had their funds locked up all this time. Those who choose to invest now are taking the risks for access to future returns.

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.

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

#55

Post by asdfasgasdgasdg »

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 only use market orders. I generally intend to hold a stock for at least a few years when I buy it. What advantage do limit orders offer me?

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

#56

Post by ars »

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.

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.

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

#58

Post by rolltiide »

mlthoughts2018 wrote: post #24
lotsofpulp wrote: post #12

Earlier quoted context omitted.

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 measur…

Efficient market theory is unfalsifiable

That should say everything you need to know

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

#59

Post by coredog64 »

supremerumham wrote: post #37
busymom0 wrote: post #23

Earlier quoted context omitted.

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…

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.
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