Coverage: Slack debuts on NYSE

Slack, the messenger/CMS company, gained a market value of over $19 billion in its first day of trading.

The BBC had the news:

Shares in messaging app Slack surged 49% as the company became the latest tech start-up to join the stock market.

Slack set a guide price of $26 a share, but rose 60% at the start of trading before easing back to finish at $39.

The company chose a direct listing on the stock market, rejecting the use of traditional advisers and underwriters who manage the price of new stocks.

That opened the possibility of wild swings in the price as traders try to assess where the shares might settle.

The jump in the share price put the value of the company at $25bn.

Bloomberg’s Ellen Huet noted the company had chosen the direct listing path and may have been right in doing so:

A parade of initial public offerings from Silicon Valley this year has garnered a mixed reception from investors. Slack Technologies Inc. took a different route on Thursday, and saw its shares soar as it went public without an IPO.

Slack opened at $38.50 on the New York Stock Exchange Thursday, well above the reference price of $26 that was set for the shares in the direct listing. The stock closed at $38.62, giving the company a market value of $19.5 billion.

That’s a huge increase from Slack’s last private funding round in August, which valued the company at $7.1 billion. Thursday’s debut makes Slack the second-most valuable technology company to reach U.S. markets this year, topped only by Uber Technologies Inc. $75 billion value and bypassing Lyft Inc. at $18 billion.

Klint Finley from Wired warned investor love is fickle:

IT’S OFFICIAL: INVESTORS love Slack. The workplace chat company went public Thursday through an unusual direct listing, where it simply made its shares available on the New York Stock Exchange, without bankers. Slack shares closed at $38.62, nearly 50 percent above the “reference price” set a day earlier, valuing the company at $19.47 billion.

Of course, investors, always a fickle bunch, could easily fall out of love with Slack. Slack has yet to turn a profit, and it faces competition from Microsoft’s chat service, Teams, which is included with Office 365, Microsoft’s flagship workplace-productivity offering, as well as smaller competitors like Flock and Mattermost.

But Slack’s public listing followed two less hyped, but likewise successful, business-to-business IPOs: video conferencing company Zoom in April and network and security company Fastly in May. Together these IPOs suggest that even as the consumer tech market is dominated by Apple, Amazon, Facebook, and Google, companies that sell to businesses can still find ways to compete with the big guys.