Question

Based on your opinion, identify a company (stock) that has good potential for growth for the long-term. Explain why you think so.

Slack Technologies Inc. (Ticker: WORK), an online instant messaging and collaboration platform, went public on June 20, 2019. Unlike traditional initial public offerings (IPO), Slack went public by direct listing. What are the advantages and disadvantages of a direct listing, compared to IPO?

Answer 1

I think Tesla has a good potential of growth in the longer period of time as the company has core competativeness in the electronic space and car making as it can be seen that there are no competitors in the electronic car making space for this company in United States of America and this company is trading at a premium valuation because these company is at a Monopoly and whatever the technology is being announced by this company can be charged at a higher price so there will be a higher margin for this company and this company has also aimed at going debt free in future because this company is trying to reduce its debt also & this be a healthy investment for shareholders in the longer period of time.

Advantages of direct listing could be that

A. Equal access to all buyers and sellers

B. Greater degree of transparency

C. Greater liquidity for existing shareholders and option holders

D. No lock up money restrictions

E. Less of the documentation in comparison to the initial public offering

Disadvantages of direct listing could be that-

A. No additional capital is raised by the company

B. Less control over the investors

C .it can be costly at times because the company can pay higher sum to financial advisors.