A direct listing differs from a traditional IPO in that it cuts out the usual underwriting process that involves lining up investors ahead of time and lets the open market play a larger role in setting the share price.
This will allow Slack to avoid paying the hefty fees that are involved in the process, and also can give shares more liquidity by avoiding the lock-up periods associated with going public through a traditional IPO. "When we think about why companies go public, they do it for liquidity, to raise their profile, for capital," John Tuttle, head of global listings at NYSE, told Business Insider in February 2018.
Still, there are some risks involved with a direct listing. While Slack has name recognition and a private-market, there is still the chance that demand could be weak without a banking contingency doing the marketing behind the scenes. The process also doesn't involve underwriters generating interest among investors.
Monday's report is another blow to the Nasdaq, which lost out on the Spotify direct listing. Last month, the exchange, allowing it to provide more clarity around direct listings to compete with the New York Stock Exchange "The exchanges want to clarify the rules so that there is no ambiguity that might deter a company from listing on that exchange," Jay Ritter, a finance professor at the University of Florida,"It's unlikely that Spotify is going to be a one-off direct listing. Some other prominent companies are very likely to use the procedure as well."
Microsoft should drop sharepoint from their product lines to form a new business named it Sharepoint Corp., and file IPO in nasdaq~