Wed. Jul 24th, 2019

A Slack director is in hot water with the SEC for saying the company, which just filed to go public, ‘will be one of the most important tech companies in the world’ (SK)

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A Slack director is in hot water with the SEC for saying the company, which just filed to go public, ‘will be one of the most important tech companies in the world’ (SK)

chamath palihapitiya 4

  • Slack director Chamath Palihapitiya made “unauthorized statements” in a TV interview, the company disclosed in an SEC filing related to its IPO.
  • Palihapitiya shared his insights into the Slack IPO in a CNBC interview, saying the office-messaging tool “will be one of the most important tech companies in the world.”
  • Visit Business Insider’s homepage for more stories.

A Slack director who said the company will be “one of the most important tech companies in the world” is in hot water with the Securities and Exchange Commission for making “unauthorized statements” ahead of the company’s IPO.

Slack, which filed to go public last month, disclosed in an SEC filing on Monday that director Chamath Palihapitiya’s remarks in a television interview with CNBC were not endorsed by the company.

His comments appeared to violate “quiet period” rules that govern companies that have filed to go public.

Slack announced that it plans to list on the New York Stock Exchange under the ticker symbol “SK” through a direct listing, in which private shareholders, including investors and employees, will be able to sell shares directly to the public.

In an April 30 interview, Palihapitiya shared his insights into Slack’s IPO, heaped praise on Slack CEO Stewart Butterfield and declared that the office-messaging company is on track to becoming a major player in tech.

“You know, one of our biggest investments is a company called Slack, and I still think to myself, why did we not just lead every single round and write the entirety of the fund into that company,” he said. “It was obvious from day one that Stewart Butterfield is an iconic CEO, and that Slack is going to be one of the most important tech companies in the world.”

CNBC host Scot Wapner also asked: “You brought up Slack, so let’s go there. You own 10% of the company? You’re on the board. I know you’re limited about what you can say as a result of all of that, but when can we expect it, and why the direct listing, and do you agree with that decision?”

“I love it,” Palihapitiya said. “I mean, I think that the decision making that Stewart has taken is incredible, both in the way that he’s built the company.” 

“He is transforming the culture,” he added. “He understands the product to a level of sophistication that I have not seen since Facebook.”

Palihapitiya then elaborated on the strengths of Facebook and of another startup that just went public, Zoom.

“You know, when I was in the bowels of Facebook building that machinery, what I saw was a team that really understood product market fit, and the power of network effects, and why that created an incredibly subsidized business, a thing that could expand all over the world at marginally zero cost,” he said.

“The only company in the world that looks like that today that is not yet public is called Slack, and it will be soon. And so, from that perspective I think it is the most incredible business that we have seen probably the next closest thing to it is a company that just went public recently, which is Zoom.”

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