Slack (software)

Direct listings challenge benefits of traditional IPOs for unicorns

Photo: Eric Baradat/AFP/Getty Images

This year's rush of unicorns to the public market is challenging many long-held notions about the stock market, perhaps most notably the idea that companies need pricey investment bankers and other well-paid middlemen to go public.

Why it matters: With a historically low number of companies going public in recent years, investment banks are relying on big deals from billion-dollar companies like Uber, Zoom and Lyft to make their money.

Uber's disappointing IPO sets the stage for Slack's direct listing

Uber banner in front of the new york stock exchange
Uber's IPO. Photo: Spencer Platt/Getty Images

Slack today will hold its "investor day," ahead of a direct public listing that's expected for early June. It may become the venture capital industry's most consequential deal since the financial crisis.

The state of play: Uber's IPO on Friday was a dud, and shares opened even lower Monday as the stock at times plunged more than 10% to below $38 per share. Some of the blame here falls on Uber and lead banker Morgan Stanley. Some of it was outside of the company's control. For most of Uber's early investors, this was still the single best deal of their careers. But much of the later-stage money is currently underwater.