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All Facts About Slack IPO You Should Know

Slack Technologies Inc., the creator of the workplace collaboration platform, Slack, is looking to go public and offer stakes in its company by filing with the SEC for an IPO. For anyone wishing to get caught up, Slack went public during the latter half of April.

In case you were interested in owning a piece of the company, here are a few facts to get you familiar with the company and its stocks:

Slack Technologies IPO: Key Facts

  • Set for structure as direct public offering (DPO) and not initial public offering (IPO).
  • The company also seeks to go public with shares that are currently classified as ‘private’.
  • You’ll know the stock by the moniker ‘SK’.
  • We’ll see the offer open to the public sometime in the next month or so.
  • With a valuation at $15 billion, now’s the time to look at investing into Slack.

Financial Highlights

  • When the company’s fiscal year ended on January 31st of this year, their revenue was $400.6 million in the positive
  • That’s an 82% increase in profit from the previous year, in which netted them a $140.7 million, 0.6 up from losses the year before that.
  • They gained capital with a cash burn rate of $97 million

Usage Statistics

  • On Slack alone, there are more than 10 million users in a single 24-hour period.
  • When it comes to messages sent and received, those total out to about 1 billion over the course of more than 40 million hours.
  • Users who decide to subscribe to paid services stayed connected on for an average of 9 hours on a given workday, in addition to being active for a 90-minute period.

Subscriber Data

  • Over 500,000 companies with a crew of three or more use the platform.
  • There are about the same amount of companies on the ‘free’ version of the messaging client.
  • Currently hosts more than 60,000 paid customers, with the company seeing a 49% increase from a year prior.
  • Plans are available for a monthly fee, annual fee, or it can be based on the number of users.
  • There are at least five dozen companies listen in Fortune 100,
  • Just a little under 600 users pay a whopping $100,000 and possibly more, by as much as 93%,
  • Slack made at least 40% of their revenue the last fiscal year, thanks to that group.

Strategic Change of Order

People who regularly use the platform may not know that Slack started out as the gaming firm known as Tiny Speck, established in 2009. What had previously been simple messaging software for another IP, the company saw potential in the messaging system (once an alternative to e-mail) and gave it complete focus.

DPO vs. IPO

Most companies will sell their stock as an IPO, meaning it extra fees for things such as investment bankers and underwriters. When a company choosing a direct public offering (DPO), they are circumventing channels that would otherwise add to their operating costs, increasing the price of their stock.

Slack has asked Morgan Stanley to take charge of collecting the orders from potential buyers and adjust opening prices for shares based on those numbers.

Like Slack, the streaming services Spotify looked to Morgan Stanley to manage their investments. Just like the creator of the team-building platform, the music streaming service decided to go with DPO last year, closing at 16.7% below the first day of trading, which h was April 3rd that same year.

How Traditional IPOs Differ

There’s nothing cheap about a company going public. While it can generate positive revenue, going with IPO will require that an organization calculate costs for the investment firm they ask to take charge. In Slack’s stead, they’d estimate demands and set the number of shares that can be offered, and at what price they can be sold at.

To handle an IPO that is larger than most, a ‘syndicate’ or temporary alliance of financial services will be headed by the lead firm who established it. And when it comes to IPOs, they fall into two categories: best efforts and firm commitment deals.

A firm commitment deal is essentially a promise by investment bankers to raise a specific amount for the entity that issued the IPO. A best efforts deal is exactly as the name implies: the investment firm does all they can to raise as much for IPO as possible.

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