Slack rose more than 58% in his debut Thursday on the New York Stock Exchange in a direct listing rather than an original public offering.
The stock under the symbol WORK opened at $ 38.50, almost 50% above the reference price of $ 26 set by NYSE on Wednesday night.
Pope puts Slack's market coverage at over $ 20 billion. From April, Slack was valued at nearly $ 17 billion in the secondary market, according to Forge Global, which matches private companies and their employees with investors. In its last funding round in 2018, Slack said it raised $ 427 million, resulting in a $ 7.1
Slack is part of a number of technical companies to be published this year, including Uber, Lift, Zoom, Pinterest, PagerDuty and CrowdStrike. But it is only the other big tech company to pursue the unusual direct listing route for the last 18 months. Spotify surprised Wall Street with its decision to record directly on the New York Stock Exchange last year.
In a direct listing, as opposed to a stock exchange listing, the banks do not sign the offer and no new shares are sold, so the company does not receive extra money for operations. It is simply a way for existing shareholders to gain liquidity by registering their shares for sale on the public market. Plus, Slack doesn't have to raise more money as it already has over $ 800 million in cash. Slack said it involved Goldman Sachs, Morgan Stanley and Allen & Company as financial advisors and several companies as associate financial advisors to assist it in the process.
While banks typically help set prices in a stock exchange listing, the NYSE sets the Slack reference price of $ 26 on Wednesday night. The opening price for Slack's Class A strain was determined by purchase and sales orders collected by NYSE from brokerage dealers, according to Slack's prospectus.
Like many technology companies, Slack debuted with a double class structure with class B shares with 10 votes per. Share to consolidate voting rights among its top shareholders. According to Slack's prospectus, Accel's largest shareholder is 24% followed by Andreessen Horowitz with a 13.3% share and social capital of 10.2%. Slack CEO Stewart Butterfield owns a 8.6% stake and SoftBank owns 7.3%.
In an interview with CNBC's Andrew Ross Sorkin prior to the actor's debut, Butterfield said that Slack's success outshines a change to email as we know it. Conventional email will be phased out in five to seven years, he said.
"Everyone will choose this," said Butterfield about Slack, which provides a platform for public and private messaging channels.
Slack reported a net loss of $ 138.9 million on revenue of $ 400.55 million for the year ended January 31. .31, Slack said it had over 10 million daily active users and saw its number of paid customers increase 49% year over year. Slack has also seen great growth among its highest paying customers, those who pay over $ 100,000 based on annual recurring revenue. The number of customers in this group was 93% higher than the year before compared to 2018, according to the prospectus.
Disclosure: Comcast Ventures, the venture company Comcast, is an investor in Slack. Comcast owns CNBC parent company NBCUniversal.
-CNBCs Jessica Bursztynsky contributed to this report.
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