Slack's Direct Listing So Successful That People Will Be Talking Trash About Conventional IPOs On Slack - Dealbreaker

The app that everyone complains about using at work is about to be the stock that everyone brags about buying at the IPO. 

Slack just went public at $38.50 a share, well over its $26 reference price. That result values Slack at around $25 billion, making it rain on the professional communication startup... and also set fire to what's left of the argument for traditional IPOs. 

As you might have heard from the exhaustive amount of discussion that proceeded it, Slack is going public via a direct listing. By eschewing the investment banks, the roadshows and the self-harm that lockup periods have become, Slack will become the poster child for going to market in what we'll soon be calling the "Post-IPO Era." Slack is a pretty niche investment play wrapped inside a Silicon Valley Cervantes vainglory bullshit mission of "Killing Email." It doesn't do anything sexy, doesn't market a future marketing platform or publicly mull over getting into the electric scooter rental business. Slack is, of course, not profitable [this is still 2019], but Slack is what it is, has a plan to be profitable relatively soon, and it's the platonic ideal of why direct listings are the future.

If you're a 60-something broker at a bulge bracket, you probably don't use Slack, have vaguely heard of it and no Goldman Sachs roadshow will really help you fully grasp the enterprise tech value of it all. It's kind of like the opposite of the buttfumble that was the SNAP IPO. Paying all those i-banking fees when it lost almost $150 million last year is a bad look, especially when no one is really going to learn anything.

Then there's the lockup period thing. Why? If underwriters are doing naked shorts on their own IPOs to protect a greenshoe that it appears certain to need, why not just let the market have its say from the first bell of the first trade? Not to mention the sometimes vast amount of value that i-banks often give away to large institutional clients by underpricing the IPO by a little too much. It also allows Slack employees to be fully invested in the company share price immediately, providing what Slack's own founder/CEO sees as a psy-ops edge on companies that did conventional IPOs and made workers watch impotently as the stock moves in parabolic shifts.

Slack will also avoid the conflicts of being covered by its own underwriters, living up to the hype of a manipulated entrance into public market life, and forge its own path with a stock price that's objectively pretty cheap by today's standards.

Or Slack will crash and burn within months because it doesn't make plant-based meat products. Who knows? Logic is dead and this market is batshit.

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