Slack will begin trading on Wednesday (June 20) on the NYSE under ticker WORK. Like Spotify, Slack said to heck with big underwriters like Goldman Sachs, we'll offer the shares through a direct listing. Slack was not the first company to offer group chat and 1-to-1 chat for corporate employees, as an alternative to email. I remember using Atlassian's Hip Chat back in the day. But Slack is certainly the most successful at having built a pretty viral platform for business chat. They also easily integrate with other apps like Salesforce, Google Calendar and New Relic. So, for example, your Operations team can get a notification on their Slack iPhone apps if New Relic sees a server hitting a memory limit. For us, this feature alone was worth the subscription price. So let's look at the numbers. Slack is already trading on the secondary market at $31.50 per share, giving it a valuation of $17 billion. Slack's NumbersEstimated FY 2020 Revenue: $600MFY 2019 Revenue: $400MRev. growth (estimated): 50%Current valuation: $17BFY 2020 P/S ratio: 28*Est. FY 2020 billings: $735MFY 2019 billings: $517MEst. billings growth: 42%* Billings is defined as sales to new customers plus renewals and sales to existing paid customers.So it's a rich valuation, but that's par for the course these days. Slack is interesting to me because it has so few competitors, it's viral and people love using it. Take Slack away from a business, and there would be loud protests, because there's nothing as good to replace it. Anyone else interested in this? Ron
Slack's NumbersEstimated FY 2020 Revenue: $600MFY 2019 Revenue: $400MRev. growth (estimated): 50%Current valuation: $17BFY 2020 P/S ratio: 28*Est. FY 2020 billings: $735MFY 2019 billings: $517MEst. billings growth: 42%
It’s tough because I’d rather have MDB, ESTC, AYX, etc at lower market caps but I also realize that software listings are getting a ton of momentum. If it trades sideways after listing, I may open a 1/3 position.
Two obvious big questions are how well they are differentiated from competition and just what price we end up with when it is actually trading. This latter issue has certainly discouraged me about some other recent IPOs.
Fwiw a cousin of mine worked on hipchat - it was acquired by Slack, in case you were unaware. Technically I guess this is a DPO, rather than an IPO. The last one I recall was Spotify - consumer internet , worse gross margins, so not really a direct comparison, but buying into the DPO hype then would have been an error, even if you like the LT future for the company I'm interested, but I'll give them a few ERs to settle most likely
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