Slack, a workplace messaging software company, is set to go public on the NYSE Thursday under the ticker “WORK” by way of a direct listing.
In a direct listing, existing shares owned by employees and other private investors are converted into publicly tradeable securities and sold to the public. Unlike an initial public offering, a direct listing does not include underwriters or the issuance of new equity.
[Read more: What to know about Slack’s direct listing]
The reference price is not a share offering price. It’s also not the opening public price for shares of Slack. Instead, it is a point of reference for investors as they put in orders for the stock.
Slack’s opening share price will be determined in a price discovery process similar to that of a regular-way IPO. Buy and sell orders will be collected from broker-dealers starting at 9:30 a.m. ET Thursday, according to the NYSE. Throughout the process, a designated market maker will put out indications on the floor of the stock exchange showing a range in which the stock could hypothetically open at a given time.
Once the market maker and Slack’s financial advisers feel the price discovery process has played itself out, new orders will be halted, the first cross will be executed and trading will continue for the newly public stock.
Shares of Slack traded in a range of between $21.00 per share and $31.50 per share in private transactions during the period of February 1 through May 30, the company said in its prospectus. The company announced that as of June 18, there were 194 million shares of Class A common stock available for trading Thursday.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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