Jan 13, 2019

Slack eyes a direct listing

Illustration: Aïda Amer/Axios

Slack is considering a direct listing at some point this year, according to reports in both the WSJ and the FT on Friday.

Why it matters: The move would allow Slack stock to be traded on the stock exchange, but it's not an IPO — no new shares would be issued, and the company would not raise any money.

  • That's no great hardship for Slack, which has already raised some $1.2 billion, per Crunchbase, and has so much money that it has an in-house VC arm that invests in other companies. Whatever growth constraints it might have, they're not financial.
  • Another advantage of a direct listing: It doesn't dilute existing shareholders. If the share price turns out to be significantly lower than earlier-stage investors like SoftBank think the company is worth, then it's a great opportunity for them to increase their stake without the company having to answer pointed questions about taking Saudi money.
  • SoftBank's Vision Fund is designed as a private equity fund, not a public-equity fund. But SoftBank founder Masayoshi Son also talks about having a time horizon of hundreds of years, and he is happy to own public companies like Sprint.

The bottom line: A lot of people would love the opportunity to invest in Slack, while many others, including employees, would love the opportunity to be able to sell their stock at will and diversify their investments.

  • A direct listing is an elegant solution that brings those two sides together. And if CEO Stewart Butterfield wants to be able to show impressive long-term growth in his share price, then if anything it helps him to go public at a relatively low valuation.

Go deeper: Spotify inspires unicorns to ponder going public via direct listing

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America's rundown roads add to farmers' struggles

Illustration: Sarah Grillo/Axios

American farmers are struggling to safely use the roads that cut through their fields; decades of neglect and lack of funding have made the routes dangerous.

The big picture: President Trump has long promised to invest billions in rural infrastructure, and his latest proposal would allocate $1 trillion for such projects. Rural America, where many of Trump's supporters live, would see a large chunk of that money.

South Korea and Italy see spikes in coronavirus cases

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

The novel coronavirus continues to spread to more nations, and the U.S. reports a doubling of its confirmed cases to 34 — while noting those are mostly due to repatriated citizens, emphasizing there's no "community spread" yet in the U.S. South Korea's confirmed cases jumped from 204 on Friday to 433 on Saturday, while Italy's case count rose from 3 to 62 as of Saturday.

The big picture: COVID-19 has now killed at least 2,362 people and infected more than 77,000 others, mostly in mainland China. New countries to announce infections recently include Israel, Lebanon and Iran.

Go deeperArrowUpdated 1 hour ago - Health

Centrist Democrats beseech 2020 candidates: "Stand up to Bernie" or Trump wins

Bernie Sanders rallies in Las Vegas, Nevada on Feb. 21. Photo: Mario Tama/Getty Images

Center-left think tank Third Way urgently called on the Democratic front-runners of the 2020 presidential election to challenge Sen. Bernie Sanders on the South Carolina debate stage on Feb. 25, in a memo provided to Axios' Mike Allen on Saturday.

What they're saying: "At the Las Vegas debate ... you declined to really challenge Senator Sanders. If you repeat this strategy at the South Carolina debate this week, you could hand the nomination to Sanders, likely dooming the Democratic Party — and the nation — to Trump and sweeping down-ballot Republican victories in November."