- A new filing from Slack gives insight into how many shares may be available for sale when the office chat company goes public in its direct listing next week.
- 180 million company executives, investors and employees have converted their high-vote Class B stock into Class A stock since April 30, the company disclosed on Friday.
- CEO Stewart Butterfield and Chief Financial Officer Allen Shim are among the Slack insiders who have converted their equity.
- While these insiders aren’t obligated to sell the shares in the direct listing, shares have to be converted to Class A before they can be sold to the public.
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New information disclosed by Slack hints at just how many shares could be put up for sale when the office chat company goes public in a direct listing on Thursday.
As of June 13, there are 180,969,751 shares of Class A stock outstanding, and 323,542,383 shares of Class B common stock outstanding, Slack disclosed on Friday.
That means that nearly 180 million Class B shareholders have converted their stock since Slack’s last disclosure from April 30.
While Slack’s shareholders don’t have any obligation to sell the shares once they are converted, this number hints at the number of shares that could be sold to the public. Shares much be converted in order to be sold.
Each Class B share has 10 votes for every one vote held by a Class A share. This structure gives greater voting power and control to founders and early investors after the company goes public.
Slack is expected to start trading shares on the New York Stock Exchange on Thursday under the ticker symbol "WORK".
CEO, investors among those who converted stock
Direct listings differ from traditional IPOs in that a company doesn’t issue new shares, and so doesn’t raise any money for itself. Rather, the process allows existing executives and investors to sell their shares to the public. Spotify was the first major company to use this technique when it went public in April 2018.
Among Slack executives who have converted their shares are CEO Stewart Butterfield, who converted 900,000 shares and Chief Financial Officer Allen Shim, who converted 100,000 shares. Venture firm Social Capital, also converted 12.7 million shares, according to company disclosures.
Slack could go public with a valuation between $16 billion and $17 billion, up from its last private valuation of $7.1 billion, Bloomberg reported. However, the price it trades at is ultimately up to investors and market-makers since there are no underwriters to set the price per share in a direct listing.
Tech IPOs are on the rise in the last few weeks. Cybersecurity firm CrowdStrike sold 18 million shares in its IPO on Wednesday, where as the pet company Chewy sold 41.6 million shares in its IPO on Friday.
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