Slack Kickstarts a Blind Auction
Not your everyday IPO! Slack’s flagship web application is used by more than half a million offices for friction-less communication. Today, it goes public by way of a blind market auction, with tech investors Softbank at the heart of it. Way to make an entrance!
Starting with Slack, which began in 2013, the web app is going viral in the workplace. With large organizations eventually becoming paying customers, revenue is doubling every year. However, profit still evades investors with competitor Microsoft in hot pursuit. One of those investors is Softbank. Making “big bang” investments in every tech startup out there is the firm’s headline-grabbing strategy. According to the Economic Times, there’s a 300-year plan behind Softbank’s dealings. Some long-term view!
As of today, the rest of us will be able to share in the Slack pie, after an unusual ‘direct public offering.’ Conventionally, Wall Street sets an initial price for a stock. Sometimes investors pay it, sometimes they don’t. Insiders aim to sell their slice to the outside world and raise a whole boatload of cash in the process. Following in the footsteps of Spotify, Slack want less fuss. Choosing to go without an initial offer, a natural price will instead emerge at whatever level Softbank and other insiders begin accepting bids from excited stock-pickers.
It’s been IPOs aplenty this year, many being cautionary tales. Bill Gurley of venture capital firm Benchmark has praised this one, believing “this is how 100% of IPOs should be done. And hopefully will one day.” The question is for investors, will Softbank show up on the sell side of the trade today or stay invested for 300 years? Slack could be very volatile in the early hours and days of its debut. Invstr-tradable on Monday, wiser to let it buff out until then!
