Slack just hinted at how many shares could be for sale in its direct listing next week

Stewart Butterfield

  • 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.

SEE ALSO: People
laughed at startup guru Eric Ries’ idea to reinvent Wall Street, so
he started a new stock exchange to prove them
wrong


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Slack just hinted at how many shares could be for sale in its direct listing next week