Another blockbuster ‘Unicorn’ company direct from Silicon Valley has made a significant splash on the stock market since opening, performing nearly 40% better than investors initially predicted.
Slack, an American cloud-based office messaging service co-founded by the creator of photo-sharing site Flickr, closed on the US stock market this week at a valuation of $20bn, far beyond expectations. The company has only been operating since 2014 and, like many of their high-value, low-return counterparts, has yet to make a profit.
Slack is seen by investors as the next level of office communication throughout the world. The service allows employees to place information into specific teams, projects and subjects of interest, known as channels.
Many see it as the next evolution of the common email, allowing for higher levels of productivity in businesses where email chains can clutter up inboxes and muddle clarity of information between teams. Founder Stewart Butterfield believes that Slack could truly shake-up web-based communication in professional environments.
Changing Tech IPOs
The San Francisco based company is only the second big tech firm to list shares directly to the market- after Spotify did the same last year- and signs look positive that their price will only continue to rise.
Experts are suggesting that, if Slack’s share price settles after the next few days, it could drastically change how other big tech companies enter the market in the coming months.
An increasing number of technology services are turning to floatation to increase general revenue; the vast majority are not making a profit at all and are in desperate need of investor cash to continue pushing out their widely used products and services.
Slack is just the latest in a number of ‘unicorn’ companies to hit the stock market.
The company, despite a $400m revenue report in 2018, lost $144m in the same year.
This has already worried potential investors, who are also concerned that Slack could be entering a very crowded market that includes dominators from Apple and Microsoft. But, the excellent end to the first week of trading could be a positive sign- especially since Slack seems to be flourishing on a market where other tech companies have struggled.