Slack Makes its Debut on the NYSE and Soars Way Above Reference Price

10:35 06/23/2019

Slack, WORK  a maker of a popular team messaging service for businesses, debuted on the NSYE on Thursday at $38.50, way ahead of the $26 reference price that was set the night before. Shares skyrocketed nearly 49% on the first day of trading.

The company had pursued an unusual direct listing rather than an IPO. This means the company did not have banks underwrite the offering.

Trading under the ticker symbol WORK, the stock saw a market cap of $19.5 billion on its first day of trading. The stock had the third largest initial trade in the U.S.

Only two other companies had opening trades of this size and they were Facebook and Alibaba according to the NYSE. Facebook had an opening trade size of $3.2 billion in 2012 and Alibaba had an opening trade size of $4.5 billion in 2014.

In an interview with CNBC’s Andrew Ross Sorkin ahead of the stock’s debut, the company's CEO Butterfield remarked that Slack’s success foreshadows a change to email as we know it. Conventional email will be phased out in five to seven years, he said.

“Everyone will choose this,” Butterfield said of Slack, which provides a platform for public and private messaging channels.

As of Jan. 31, the company says it had over 10 million daily active users and saw its number of paid customers increase 49% year over year.

Mad Money Host Jim Cramer said before the stock's debut, 'I’m willing to let you pay $40. ... That’s well above” the reference price of $26. Now if you can get it below that, that’s even better. If not, you keep your bat on your shoulder.'

According to Cramer, Slack is a 'fresh-faced” enterprise software play with a strong growth rate.

“This is exactly the kind of stock that investors ... they can’t resist it, they can’t get enough of it,” he said. “So I expect this one to run tomorrow.”

“In short, Slack’s overall growth is fantastic,” he said. “The company’s on the path to profitability. The balance sheet is fine.”

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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