In its untraditional public offering Thursday, Slack's stock took off in early trading, and currently is at over $41 per share — well over the reference price announced late Wednesday of $26 per share.
The current stock price, if it holds, means that the company's valuation at the end of today could be close to $25 billion, or three and a half time what its last valuation was as a private company, which was $7.1 billion.
Because the stock offering was not a traditional IPO but a direct listing, which involved the creation of no new shares, a number of Slack employees likely got very rich on paper today. And because it was a direct listing without any reported "lockdown" period for selling one's shares, that could translate to actual cash for whoever is selling a significant portion.
As the New York Times surmises, all the investor enthusiasm for Slack and other smaller tech companies (including SF-based Zoom, whose stock has shot up 59% since its mid-April IPO) has something to do with the scope of their business and their potential for growth. Slack was known to have enough operating capital that it did not need to raise money through an IPO, and saw 82 percent revenue growth last year despite little growth in its user base. (Fortune earlier suggested that a runaway stock price for Slack could mean it will do a traditional, second offering of stock in the coming weeks, diluting the existing shares but raising another few billion dollars in cash.)
This is in contrast to the recent lackluster IPOs of Uber and Lyft, neither of which is near profitability, and both of which are operating in untested waters, both legally and economically.
As CEO Stewart Butterfield said to the Times after ringing the opening bell at the NYSE Thursday morning, going public will have the benefit of added scrutiny of the company's financials — something that will aid in user growth. Larger customers have apparently been cautious in adopting Slack for fear that the company wasn't sustainable, and now they can be put at ease.
Slack's main rivals in the workplace communication space are the much larger companies Microsoft and Facebook, though investors clearly see Slack's product as being able to hold its own. But Slack itself sees the overall market for workplace collaboration services at around $28 billion, which is less than what Microsoft earns in revenue in a single quarter.