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Illustration: Aïda Amer/Axios

Slack went public this week via the most elegant and efficient way possible — a direct listing. The opening auction of the stock cleared around noon on Thursday, at a price of $38.50. It then traded smoothly, under the ticker symbol WORK, for the rest of the week within a pretty narrow range between $36.50 and $42.

Why it matters: No one received preferential treatment. There was no possibility of the kind of scandalous behavior whereby banks like Goldman Sachs receive millions of dollars' worth of kickbacks from clients they place into hot IPOs.

  • Slack insiders sold $1.8 billion of stock in the opening auction, largely because the price was so high. In an auction system, sellers of stock can increase the amount they want to sell as the price goes up. Slack saw the perfect combination of a high stock price with a high volume of shares traded.
  • Traditional IPOs are "archaic and nepotistic," as venture capitalist Bill Gurley says. The direct model allocates stock to the highest bidders, which is much more logical.

What to watch: Slack and Spotify — which also opted for a direct listing — didn’t raise any new equity capital when they went public. But they can do so at any time, now that there's a deep and liquid market for their stock. And future IPOs might also use an auction system to allocate stock, a bit like Google did in 2004.

The bottom line: No matter how plugged in to the markets they are, IPO bankers will only ever be able to talk to a small subset of investors before they take a company public. The Slack auction — just like the Zoom IPO before it — shows just how unexpectedly large the bid can be when a hot, fast-growing company hits the market. It's silly for companies not to take full advantage of that upside.

Go deeper

Updated 7 hours ago - World

Mexican President López Obrador tests positive for coronavirus

Mexico's President Andrés Manuel López Obrador during a press conference at National Palace in Mexico City, Mexico, on Wednesday. Photo: Ismael Rosas/Eyepix Group/Barcroft Media via Getty Images

Mexican President Andrés Manuel López Obrador announced Sunday evening that he's tested positive for COVID-19.

Driving the news: López Obrador tweeted that he has mild symptoms and is receiving medical treatment. "As always, I am optimistic," he added. "We will all move forward."

7 hours ago - Politics & Policy

Sarah Huckabee Sanders to run for governor of Arkansas

Sarah Huckabee Sanders at FOX News' studios in New York City in 2019. Photo: Steven Ferdman/Getty Images

Former White House press secretary Sarah Huckabee Sanders will announce Monday that she's running for governor of Arkansas.

The big picture: Sanders was touted as a contender after it was announced she was leaving the Trump administration in June 2019. Then-President Trump tweeted he hoped she would run for governor, adding "she would be fantastic." Sanders is "seen as leader in the polls" in the Republican state, notes the Washington Post's Josh Dawsey, who first reported the news.

Coronavirus has inflamed global inequality

Illustration: Aïda Amer/Axios

History will likely remember the pandemic as the "first time since records began that inequality rose in virtually every country on earth at the same time." That's the verdict from Oxfam's inequality report covering the year 2020 — a terrible year that hit the poorest, hardest across the planet.

Why it matters: The world's poorest were already in a race against time, facing down an existential risk in the form of global climate change. The coronavirus pandemic could set global poverty reduction back as much as a full decade, according to the World Bank.