Is an IPO a thing of the past?

By Hoda Mehr Fri, Jun 21, 2019

“I’ll Slack you.”
“Slack me that thing you were telling me about.”
“Can you join our Slack channel?”

Slacking is a verb now. And, millions of us, more than 10 million people to be exact, are Slacking every day. It’s an alternative to emailing, it keeps track of all your conversations, and boy, oh boy, it distracts you (ahem: helps you) every day to do a better job at communicating with the world. Today, Slack (Searchable Log of All Conversation and Knowledge) Technologies became a publicly traded company using ticker symbol WORK. But, there was no IPO! Ha?

The company joined another well-known new publicly traded company – Spotify (Ticker: SPOT) to directly list its shares on New Your Stock Exchange without using investment bankers and raising money. Slack and Spotify skipped the typical costly process of underwriting their public offerings, avoided paying the fees and signaled to the world that they don’t need to raise money. Slack’s shares soared to the high of $42, up from the starting price of $26 per share, and made its initial investors and employees very happy.

What does it mean for investors?

This is again another unprofitable technology company for you to invest. But, more importantly, this might be the start of a new trend for direct listing without IPOing. This is not as good news for investment bankers and stock exchanges. The world of investing is rapidly evolving, and this is a new development that may make the industry less complicated.

• U.S. markets: Four days in a row, the U.S. stock market closed higher than where it started the day before. All sectors are up, with the Energy sector sporting more than 2% daily gain and pushing the market higher than where it was in the morning. Tip: Scroll down to the Overall Market section to learn why. 
• Bonds: The 10-year Treasury Yield fell lower than 2% for a while as investors expect an interest rate cut in the future. Following the Fed’s announcement of a stable interestest rate in 2019 (we talked about this in yesterday’s Daily Scoop), the investors are now speculating that a rate cut will eventually happen and that pushed the long-term Treasury note’s yield to lower than 2%.

It’s about Oil again. 

What happened yesterday?

“Iran made a big mistake,” tweeted president Trump today, which surged the oil prices up and the Energy sector and the stock market with it. The Oil price is also boosted by the lower than expected oil supply by the U.S. and prolonged supply constraints by OPEC.

Now, what?

Well, it’s good that the stock prices are up today. But, make no mistake that political back and forth between the U.S. and Iran and Oil supply restrictions will hurt the overall economy in the long term. It’s a good thing now, but not so desirable in the long run.

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At last, some good news for PG&E. 

Shares of PG&E Corp (Ticker: PCG) was up more than 7% thanks to a bit of good news circulating around. The utility provider has gone bankrupt due to the high cost of damages it has to pay to the victims and public entities impacted by the wildfires of California. This time though, instead of bad news, the company announced that it has reached an agreement to resolve the wildfire claims and it will make $1 billion to 18 different public entities as part of a Chapter 11 Plan of Reorganization.

It also didn’t hurt to hear Gavin Newsom, California’s Governor, asking the lawmakers to create a fund to support utilities to pay for such damages and avoid catastrophic consequences when utility providers are forced to go bankrupt.

Having said that, don’t jump in and invest in PG&E yet. The company still has a bumpy road ahead. There are plenty of other exciting dividend-paying companies that are not dealing with bankruptcy that you may consider investing in them instead.

Is this ship sinking? 

The management team at Carnival Corp (Ticker: CCL) are not having a good day, as the stock price sank more than 7%. For the second time, the leadership adjusted their expected earnings for the fiscal year, and despite topline growth, the forecast is murky. That was enough to drag the share price down today. Lower yield in Europe, the impact of government policies related to Cuba are among the anchors weighting this ship down (ahem, pun intended!) 

However, don’t just go and sell your shares. The topline revenue is growing, and the demand for cruising is not slowing down. This might be a good stock to add to your watchlist.

When Netflix (Ticker NFLX) brand is equivalent to the definition of being edgy and provocative, even Amazon (Ticker: AMZN) is a little bit jealous!

So, what happened? 

More than 20,000 people signed a petition asking Netflix to remove the new series Good Omens from its platform. So far, so good! Right? Petitions are the best way consumers voice their opinions and ask for what they expect from the companies.

Well, the problem is that the series doesn’t belong to Netflix. Poor, hardworking people at Amazon Prime spent millions to create new and edgy content to grow their subscribers, and this is how they get rewarded! Joking aside, this is the power of Netflix brand at its best!

Brought to you by Hoda Mehr, Editor at Trade Stocks, CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 8,000 stock market investors and manages Stock Card’s successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism and storytelling to all aspects of her work. Subscribe for free here.

About the Author

The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card