DJ Slack Executives and Early Investors Sold Half-a-Billion in Stock When It Went Public -- Barrons.com
By Ed Lin
Slack Technologies stock recently went public in a direct listing on the New York Stock Exchange, and that also meant company insiders and early Slack investors could sell their shares immediately. Conventional initial public offerings restrict such sales until a lockup period expires.
Company executives and venture capital firms have sold $592 million of class A Slack stock (ticker: WORK) since the listing, nearly all on the first two days, June 20 and 21. They sold 15.3 million shares at an average price of $38.76 each, which was far above the $26 reference price established for the collaboration-software firm by the NYSE before trading opened. Shares have come down since then. The average price at which early insiders sold was 3.3% higher than Friday's closing price of $37.50.
VC firms also distributed millions of shares of Slack stock to their limited partners, in addition to selling shares on the open market.
VC firm Accel sold the most Slack stock, 8.5 million shares for $329.5 million. Accel didn't respond to a request for comment on the sale. Accel continues to own 11.5 million class A Slack shares and 89.9 million class B shares, according to a form the firm filed with the Securities and Exchange Commission. Class B shares, which don't publicly trade, each carry 10 votes and are convertible at any time into the class A shares, which trade on the NYSE and each carry one vote.
Read our recent feature: Slack Goes Public as It Tries to Kill Email
Andreessen Horowitz sold 3 million Slack shares for $116 million. The firm, which declined to comment on the transaction, now owns 19.3 million class A shares and 34 million class B shares.
Social Capital sold 1 million shares for $39.7 million. It didn't respond to a request for comment. Social Capital now owns 11.7 class A Slack shares and 38.1 million class B shares.
Slack co-founder and CEO Stewart Butterfield led executives by selling 1.4 million shares for $53.2 million; 498,409 shares were sold to cover tax-withholding obligations associated with the vesting of restricted stock units. He now owns 32,717 class A shares, 41.1 million class B shares, and 2.1 million restricted stock units, which each represent the right to receive one class B share.
Slack Chief Financial Officer Allen Shim sold 502,925 shares for $19.4 million; 402,925 shares were sold to cover tax-withholding obligations. Shim now owns 240,000 class B shares and 206,250 restricted stock units. Shim also owns an additional 1.6 million class B shares through trusts.
Four other Slack executives have sold a total of 887,064 shares for $34.1 million.
Slack declined to make Butterfield and Shim available for comment, saying the company was in a quiet period.
Write to Ed Lin at edward.lin@barrons.com and follow @BarronsEdLin.
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June 29, 2019 07:29 ET (11:29 GMT)
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