**WORK is the new catchphrase…**but it’s not because everyone feels like a hamster in a wheel. Instead, it’s due to Slack, a workplace-focused messaging client, **growing its share price by 48%** on its first day of trading last Thursday at the NYSE, though it went for a direct listing instead of an IPO. The initial reference price of $26 peaked at $42 before closing at $38.62, giving the company a market cap of $20 billion.

**What’s so good about Slack?** It’s the latest in a trend of enterprise Software-as-a-Service tech companies going public, and like Zoom, an enterprise tool aimed at conferences and telecalls, it has pretty good numbers. For example, among its 100,000 paying clients are names like **HSBC and** **Ford**, and no doubt their new listing will do wonders to attract new business.

**And the financials?** The picture is a little rosy here. While tech companies have pulled huge valuations when they go public, they’ve often struggled to turn a profit. According to an amended S-1 filing, Slack posted $138.4 million in revenue Q1, on losses of $31.8 million, which represents a **67% growth in revenue** compared to the same period last year. On the other hand, Slack is now sitting on $900 million of cash, so they probably have the ability to wait out their path to profitability – and judging by Day 1 trading, the markets agree.

**What’s a direct listing?** Direct listings were developed relatively recently, by Spotify working with financial regulators, and allows for algorithmic market pricing, speed, and lower fees, though unlike an IPO, it didn’t get to raise new capital or gain new investors. By choosing the direct listing route, Slack avoided needing underwriters, as well as avoiding the need to include bonafide pricing estimates.

**What We Think:** If you work in an office, you’ve probably used Slack. And, like it or not, it’s only set to grow as the company shifts to taking advantage of its higher capitalization. Slack’s goal of replacing email is also being rewarded by the markets, and its better UI (31% of respondents to a recent poll market it as best)  gives it a leg up in a field that includes Skype for Business and Microsoft Teams. Now that Slack has the cash to last four to five years without additional funding, it’s a good bet that its use and popularity will grow – meaning good things for Slack investors.

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