By Jon Swartz

Bloomberg News/Landov
When Slack Technologies Inc. said it was taking the unusual route of a direct listing rather than a traditional IPO after Uber and Lyft’s high-profile offerings landed with thuds earlier this year, conventional wisdom suggested it was dodging a rough year for tech IPOs. Right? Wrong.
The messaging platform, flush with funding and brand name recognition, is merely taking an unconventional path in what has so far has been a banner year for tech initial public offerings. ”We made our decision to go public last year,” Slack Chief Financial Officer Allen Shim told MarketWatch early Thursday, hours before its public debut. “At this point, being public helps us in credibility with investors and the enterprise market.”
Slack’s /zigman2/quotes/212180539/composite WORK +1.16% direct listing, which lets investors sell into the public markets, set its reference price at $26 per share late Wednesday, suggesting a market valuation of $15.7 billion. It opened at $38.50 on Thursday, and has soared 58% to $41.26.
For more news: https://www.marketwatch.com/story/slack-stock-soars-after-direct-listing-2019-06-20?mod=mw_theo_homepage
Slack’s direct listing is the latest indication that tech stocks remain in strong demand on public markets despite the missteps of its two biggest IPOs this year, Uber Technologies Inc. /zigman2/quotes/211348248/composite UBER -0.99% , and Lyft Inc. /zigman2/quotes/208999293/composite LYFT -0.41%
/zigman2/quotes/208999293/composite LYFT -0.41% See also: Slack non-IPO: 5 things to know about the direct listing
Led by Pinterest Inc. /zigman2/quotes/211319641/composite PINS +0.68% , Beyond Meat Inc. /zigman2/quotes/211617595/composite BYND -3.34% , and Zoom Video Communications Inc. /zigman2/quotes/211319643/composite ZM -2.91% tech companies have contributed 58% of the $26.7 billion raised this year, according to Renaissance Capital, which provides institutional research and IPO exchange-traded funds. Uber sold $8.1 billion worth of stock alone during its May IPO. Airbnb Inc., WeWork, Palantir Technologies, and food-delivery service Postmates are expected to debut later this year.
“It is very clear, institutional investors have a tremendous appetite for new issues,” Lise Buyer, founder of Class V Group, told MarketWatch in a phone interview.
Read: Chewy IPO: 5 things to know about the ‘pet humanization’ products seller
Slack’s success is likely to influence Airbnb and WeWork, both of whom are reportedly mulling direct listings of their own. Buyer believes both are among a select few that could pull it off because they are “extremely well-funded” and possess strong brand name recognition.
Another strong tech IPO week is coming
Before Uber’s IPO, a handful of U.S.-based tech companies raised $6.6 billion in total funding this year. Four of them – Lyft, Pinterest, Zoom, and PagerDuty – have a current combined market valuation of $63.5 billion, according to CB Insights. (Uber’s market value is $74 billion.)
While Uber and Lyft struggled out of the gate before rebounding, the typical tech IPO is actually performing quite well. The average return for the 66 IPOs so far this year is 30%, according to Matt Kennedy, senior IPO market strategist at Renaissance. The 16 tech IPOs are up 38%. The S&P /zigman2/quotes/210599714/realtime SPX +1.25% , meanwhile, is up 16% on the year.
In case you missed it: Beyond Meat goes public with a bang: 5 things to know about the plant-based meat maker
SharesPost research shows the best-performing tech IPOs through Monday are Zoom Video at 172%, PagerDuty Inc. /zigman2/quotes/210571191/composite PD +2.32% at 130%, and CrowdStrike Holdings Inc. /zigman2/quotes/212513426/composite CRWD +1.39% at 101%. Uber is trading 4% below its offer price, and Lyft is down 15%.
























