Slack’s IPO; S&P Hits New Record; Treasury Yield Plummets
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NOT YOUR DADDY’S IPO
I’ve got good news and I’ve got bad news. The good news? Business Insider’s relentless coverage of Stewart Butterfield’s pivot from failed game creator to successful email slayer will come to an end. The bad news? BI will start undoubtedly begin running “Here’s how much you would have made if you bought Slack stock at its IPO price.”
That’s right, Slack is officially a publicly traded company. Shares of the AOL Instant Messenger on steroids rose nearly 50% from their reference price of $26 per share on the company’s first day as a public entity.
Like any unicorn worth a damn, Slack loses a boatload of money. But, for what it’s worth, it has narrowed its losses significantly in the past year.
You may (read: definitely) have heard that Slack went public via a direct listing. What’s a direct listing exactly? According to Investopedia, it’s a means of listing on a stock market without offering new shares … and irking Wall Street banks in the process.
By forgoing a traditional IPO, Slack cost the smartest guys in the room millions in potential revenue … and the chance to do cocaine on private jets during a roadshow. Damn shame.
So if bankers didn’t get rich, who did?
Slack’s market cap sits around $20B, or almost 3x more than its last private valuation of $7B. And that means some people got filthy rich when Slack IPO’ed. We’re talking f*ck you money.
The winners include CEO, Stewart Butterfield, whose stake is worth about $1.6B, its largest shareholder, Accel which holds shares worth approximately $4B and Social Capital, Andreessen Horowitz and Softbank who all boast stakes worth north of $1B.
RISING TO THE OCCASION
Bust out the “S&P 2,954.18” hats.
The S&P 500 closed at an all-time high yesterday following the Fed’s indication on Wednesday that a rate cut later this year is all but guaranteed. And it wasn’t alone. The Dow rose more than 250 points and the Nasdaq was up nearly 1% yesterday alone.
This, of course, follows last month’s bloodbath that marked the indices’ worst May since 2010. Although trade war concerns remain, markets appear to have a fever and the only prescription is more rate cuts.
The S&P’s record-setting day coincided with the 10-year US Treasury note yield dropping below 2% for the first time since 2016.
As a friendly reminder, when bond prices rise, yields fall. So falling yields indicate that investors are piling into US debt, likely because they’ve got a baddd feeling about the economy. This is fine.
Not to be forgotten, oil prices jumped yesterday on the news that Iran shot down an American drone near the Strait of Hormuz, a recent hotbed for Iranian attacks. Fears of a US-Iran conflict and potential supply disruption sent the price of black gold skyrocketing.
IN OTHER NEWS
- Paypal is in the market for a new COO as Bill Ready, the mastermind behind the growth of PayPal’s Venmo is leaving the company at the end of the year. Billy Boy’s been at PayPal since 2013 following the company’s acquisition of Braintree. PayPal shares fell 1.2% in extended trading on the news.
- If you bought a MacBook between September 2015 and February 2017, you may want to keep a fire extinguisher handy. Apparently, the laptops are going all Galaxy Note 7 (read: blowing up). Apple recalled machines manufactured during the period citing a “battery that may overheat and pose a safety risk.” Apple will replace the battery at no charge. There’s no telling if the company will replace your apartment that burns down because you left your laptop plugged in while you were at the work.
- Walmart has agreed to settle criminal and regulatory investigations stemming from alleged bribes paid in Mexico, Brazil, China, and India. The company will pay $144M to the SEC, and another $138M to the US Justice Department, after agreeing that its policies meant to thwart corruption were less than airtight, and violated the Foreign Corrupt Practices Act.
- Google is waving the white flag when it comes to tablets. The tech giant has revealed that it won’t be pursuing additional market share in the space and will be canceling the production of two tablet products that have yet to be released. Resources dedicated to building a new tablet will focus on the company’s Pixelbook laptop line.
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