The workplace-messaging app Slack is the latest tech unicorn to charge Wall Street this year, its shares soaring more than 50% in its first day Thursday.
The debut of the stock — in a direct listing on the New York Stock Exchange under the ticker symbol Work — pushed its total market cap to more than $20 billion.
Three experts weigh in on what comes next for the stock.
Dimitri Kallianiotis, research analyst at Atlantic Equities, sees a massive addressable market for the company.
"We see a big opportunity for messaging to turn viral in the enterprise sector, a bit of what we've seen in consumer where everybody's using applications like WhatsApp. So in terms of the user base for Slack, they've already over the last five years grown to 10 million users, and we expect that to basically grow to 50 million users … and that would just be a fraction of the market."
Rishi Jaluria, senior research analyst at DA Davidson, says the stickiness of the product is a draw, but he's waiting for lower valuations before jumping in.
"My due diligence when talking to Slack customers is really positive. It's a very cultish product, people who use it really like using it, and once they start becoming active Slack users they become really dependent on it. I've even heard cases of people saying, 'I won't work for a company that doesn't have Slack.' But I look at the valuation right now that Slack's coming public at and it's up there with some of the most expensive names in software like a … MongoDb. I just think I want either a more attractive entry point or I'd want to see evidence that Slack can gain traction in other industries outside of tech."
Glenn Solomon, managing partner at GGV Capital, lays out why Slack opted for a direct listing over a more traditional IPO.
"The performance of Slack and its stock price over time is going to be a result of how they do financially, and so the direct listing is certainly an interesting feature to the Slack debut. As was mentioned they have a lot of cash on their balance sheet, so they didn't have to raise money in this event. And because people know the product, the marketing that comes along with an IPO wasn't that important to them. So I'm really more focused on how does the company perform over the next ensuing quarter, two quarters, three quarters and years out, and I think the opportunity is vast."