Bankers Can't Feel Great Helping Slack Go Public

This post originally appeared in Money Stuff.

How much do you think Slack Technologies Inc.’s investment bankers will charge it for advising on its direct listing, in which Slack will go public just by listing its stock on the exchange without selling any shares in an initial public offering? When Spotify Technologies SA went public in a direct listing last year, supposedly cutting Wall Street banks out of the lucrative IPO business, it actually paid its Wall Street banks more than $30 million of fees, which is maybe a little on the low side but not a terrible payday for an offering that, after all, didn’t raise any money for the company. But those fees were so high because Spotify and its banks were figuring it out as they went along: There had never been a comparable direct listing by a large high-profile company on modern U.S. stock markets, and so the banks needed to answer basic questions like whether it was even allowed, and what legal documents you needed, and how to tell the company’s story to investors without a traditional roadshow, and how to line up investors for the first day of trading without a traditional bookbuilding. It was all novel and complicated and required a lot of work and a fair amount of skill and market judgment.