SA国际传媒

Morning Markets: While we wait for Uber to price its IPO and begin trading, Slack is nearly ready to put out its direct listing filing.

There’s a lot to talk about today. earnings report is . , sending its own stock north as well. in its own Q1 earnings report but isn’t being dinged by the market. Yet, at least.

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And at a (SA国际传媒 down as a $70 million infusion on top of a $430 million pre-money valuation). I could go on as there’s a lot happening.

But the top news for us this morning is that debut filing is expected to drop this Friday. That’s tomorrow, so let’s explore the situation.

What We Know

Slack is pursuing a direct listing. A normal IPO, in contrast, involves selling a bloc of shares at a set price. The transaction raises money for the company going public and sets a starting price for the company’s equity. A direct listing doesn’t sell new shares and doesn’t have as hard a starting price.

Why not raise money? Slack doesn’t need the funds. It’s a with hundreds of millions of dollars in the bank. By targeting a direct listing it’s saying that it is willing to float, but unwilling to sell more shares of itself, avoiding further shareholder dilution.

The has :

The [SEC filing] will show that Slack is on pace for about $500 million in annual revenue this year, one of the people said. Slack isn鈥檛 profitable, because it continues to spend money on growth, the person said.

Fair enough. Slack at a $500 million run rate breaks down to about $125 million in quarterly revenue. Expect a Q1 result from Slack of around that size.

This means that the SA国际传媒 News estimate penned by myself is going to come in light. Here’s this publication in September of 2018:

So, Slack could head into its IPO, provided that it does so around the midpoint of the first half of the year, with roughly 4.5 million paid seats. Thanks to Slack鈥檚聽, we can pretty well guess that the firm would be at an ARR pace of around $450 million at that point.

Provided that Roof’s “on pace for about $500 million in annual revenue” implies a $500 million ARR pace in Q1, our estimate is a bit low. We’ll see when the final numbers land, but I’m irked that I undershot.

Regardless, the above means that tomorrow will mark one of the final steps towards Slack leaving the private world behind. See you then.

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