Enterprise software IPOs over the past 12 months are trading, on average, at more than 100 percent above their IPO price, Ortiz said. Recent enterprise software IPOs include Crowdstrike Holdings Inc and Zoom. They continue to perform very well," he said. "Investors have a love affair with enterprise software companies, and with good reason. The strong open built on a string of successful IPOs for enterprise software companies, said Alejandro Ortiz, a principal analyst at SharesPost. Slack's direct listing could have implications for other large technology companies such as Airbnb Inc, which is considering going public through a similar approach, a person familiar with the matter said. "We think a direct listing is a more effective and efficient way to get to a normalized level of supply and demand without the constraints of an IPO," said Allen Shim, Slack's chief financial officer. The direct listing model offers Slack an opportunity to save significantly on investment banking fees and avoid restrictions on insider stock sales. The debut follows a spate of high-profile technology IPOs, some of which, including Uber Technologies Inc and Lyft Inc, had disappointing starts to trading. Slack's listing opened with about 40 million shares trading to outside investors, providing better-than-expected liquidity for the stock, a person familiar with the matter said. "They are going to have to do an awful lot to get the company's fundamentals to justify that kind of valuation," she said. That multiple is lower than for other tech companies' IPOs like Zoom Video Communications Inc, which trades at 88 times revenue, but is very high considering that Slack is not yet profitable, said Kathleen Smith, a principal and manager of IPO ETFs at Renaissance Capital. Slack's trading price gave it a valuation of more than 50 times revenue.
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