Asana valued at $4.5bn as market awaits Palantir debut

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Asana, the business software company led by Facebook co-founder Dustin Moskovitz, was valued at nearly $4.5bn after making its debut on the US stock market.

Shares in the company opened at $27 and traded up to $29 in one of two hotly-anticipated direct listings on the New York Stock Exchange due on Wednesday.

Palantir, the data analysis company, will also enter the public markets through a direct listing, an alternative to a traditional initial public offering, but its shares had yet to price by lunchtime in New York.

Asana sells task-management software used by organisations including Google and Nasa. At its most recent equity fundraising in November 2018, the company was valued at $1.5bn.

The twin debuts provide a test for the direct listing process and their shared lead adviser, Morgan Stanley, as well as for Citadel Securities, the market maker overseeing the trading for both companies. Unlike in an IPO, Asana and Palantir have to match demand from public investors with supply from existing private shareholders to execute their first trades.

Both groups are listing on the NYSE, which on Tuesday released a reference price of $7.25 for Palantir, implying the company would have a market capitalisation of about $11.7bn. The exchange listed Asana’s reference price at $21.

Reference prices, based on private trades, act as a guide to the market but are not the same as an IPO price, which is the amount investors pay for shares in a typical flotation. Both Slack and Spotify, which went public through direct listings, traded above their reference prices upon listing.

Asana and Palantir enter a hot market for new tech listings, following the cloud computing company Snowflake’s $3.4bn IPO. That marked the largest of the year and the biggest on record for a US software group.

“Both companies are fast growing and highly unprofitable,” said Bill Smith, chief executive of Renaissance Capital, a fund manager of IPO exchange traded funds. “Asana has achieved a sticky customer base and strong net retention, and Palantir has long contracts with its customers.”

Palantir stands apart from the Silicon Valley tech establishment for brandishing its close ties to the national security community. 

The company is led by Alex Karp and co-founded by Peter Thiel, the venture capitalist whose support for President Donald Trump has placed him at odds with his more left-leaning peers. Along with another co-founder, Stephen Cohen, they will retain control of the company through a complex voting structure that has raised concerns among corporate governance watchdogs.

Unlike in similar direct listings, Palantir will keep the majority of its stock locked up for months after it goes public, allowing only a portion of its class A common stock to trade on the first day.

The direct listings join 11 IPOs this week, making it one of the year’s busiest. The run of flotations has tracked the booming stock market rally against the backdrop of the Covid-19 pandemic. 

Proceeds raised in IPOs for the year have already eclipsed every year since 2014, when Alibaba set a record for the largest US listing, according to Refinitiv data.

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