On: Slack Says It's Filed to Go Public

[nemothekid]

To provide liquidity to employees and investors.

[Johnny555 → msalomon]

Not if you're an employee or investor.

[LeoNatan25 → Johnny555]

If only the current economic system would encourage dividends rather than stock.

[pathseeker → LeoNatan25]

What do you think dividends are paid on?

[icelancer → LeoNatan25]

Dividends do not solve this problem.

[aetherson → msalomon]

They're the owners of the company. They get to (collectively) decide when they want to cash out.

[SketchySeaBeast → nemothekid]

More than the cash it currently has? It's a grab for an even bigger pile of money?

edit: Ah, missed the employees angle.

[nemothekid → SketchySeaBeast]

The "cash" who has? The employees don't have cash - they have stock. You can't pay rent with stock.

This is a good move by Slack to provide a return to the employees who have stuck with them.

[SketchySeaBeast → nemothekid]

Ah, ok, so the employees will be getting money for their stock? That makes sense now.

[icelancer → SketchySeaBeast]

They'll own stock they can trade publicly. It's their call now, rather than holding on to a bunch of fictional dollars.

[shimms → SketchySeaBeast]

If they choose to sell it.

Whilst markets exist for selling shares in private companies, it’s harder and there is a smaller pool of people looking to buy.

On the public market, any shareholder can sell their shares (relatively) easily, and since it’s a public market the pool of potential buyers is much bigger.

Employees don’t automatically get money for their shares, being public just makes it easier for them to if they decide they want to.

[1123581321 → SketchySeaBeast]

The company could only use cash to do dividends or share buybacks, and the company is worth more than its cash on hand (maybe 10-20x as much more in Slack’s case.) A public offering makes it possible for effectively every shareholder to sell their shares for the full value without the company having to make a strategic financial decision to return cash to shareholders.

[koolba → SketchySeaBeast]

It would be cash for individuals who till now have illiquid options or private stock. Not just the company’s war chest.