Slack Technologies Market Cap is Now $20 Billion

June 21, 2019
738 Views

Business communications and software company Slack Technologies Inc. (US: WORK) has ended its first day of trading with a valuation around $20 billion. This is almost three times the valuation that the company received before going public.

The company, which arrived on the stock market with a direct listing, is now one of the most valuable businesses in its industry.

Huge Investor Confidence for Slack Technologies

Stock hit the market on Wednesday trading at a price of $38.50. This was 48% higher than the reference price of $26 that was set earlier this week. Stock finished the day at $38.62, leaving it with a market capitalization of $19.5 billion. When Slack was last valued in 2018, it was worth just $7.1 billion.

Slack is the latest technology company to have a high profile entrance on the stock market. However, unlike many of its peers, this company chose to go with a direct listing rather than a traditional IPO. There are currently 194 million Class A shares and 310 million Class B shares in circulation.

Although it has only been on the market for a single day, analysts believe that Slack could fare as well, if not better than some recent technology listings.

  • Zoom Video Communications Inc. (US: ZM) is a video and text messaging company that has grown 34.16% in the last 30 days.
  • CrowdStrike Holdings Inc. (US: CRWD) is a cloud software holding company that has grown 16.66% in the last five days.

Like Slack, these companies came to the market with direct listings. Tech-minded investors see a lot of potential in next-generation software companies, especially those that provide highly monetizable services.

Slack focuses on business and enterprise markets, providing a communication and collaboration platform. The company offers its core services for free, while generating revenue from large customers who pay for premium subscriptions. It has high long-term earnings potential, so it is not surprising that investors have responded well to the direct stock listing.

Will Slack Be Able to Maintain Momentum?

Slack’s revenue increased 82% in 2018, exceeding $400 million. Growth was slower in the first fiscal quarter of 2019, with revenue up 67% year over year. Despite the growth rate decline, this is still an impressive figure for any company.

The plans to implement new strategies that will entice up to 500,000 free customers to pay for subscriptions. If Slack can achieve the right value proposition, its long term revenue generation capabilities will be up with the best in the software business.

You may be interested

Job Hiring is Picking Up as Employers and Consumers Gain Confidence
Economy
575 views
Economy
575 views

Job Hiring is Picking Up as Employers and Consumers Gain Confidence

Lamont J - March 29, 2021

The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…

Fed Could Maintain 0% Interest Rate Until 2024
Economy
509 views
Economy
509 views

Fed Could Maintain 0% Interest Rate Until 2024

Adam R - March 26, 2021

The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…

Supply Constraints Could Slow the Home Market
Economy
582 views
Economy
582 views

Supply Constraints Could Slow the Home Market

Becky H - March 25, 2021

Low inventory has been a constant in the home market for more than a year. The supply of existing and…