shares opened at $27, above the $21 “reference price” announced by the New York Stock Exchange last night for the company’s direct listing, and has since ticked above the $29 level.
With about 154 million shares outstanding, San Francisco-based Asana (ticker: ASAN) at the first trade had a market capitalization of about $4.2 billion. Asana provides cloud-based project management software. The company’s founder and CEO is Dustin Moskovitz, who also was a co-founder of Facebook.
Asana recently reported revenue for its fiscal second quarter ended July 31 of $52 million, up 57% year over year, with a non-GAAP (generally accepted accounting principles) loss of $13.7 million, or 34 cents a share.
For the third quarter, the company sees revenue of $53.5 million to $54.5 million, with a non-GAAP loss of 36 to 38 cents a share. For the January 2021 fiscal year, Asana projects revenue of $210 million to $213 million, implying growth of 47% to 49%, and a non-GAAP loss of $1.30 to $1.33 a share.
At $27, trades at a valuation of about 20 times current year sales, far below the current valuation for other cloud software companies like
(SNOW) at more than 100 times, and
(ZM) at about 60 times.
The fact that the stock started trading above the reference price is consistent with other direct listings. The most recent major direct listing was
(WORK) in June 2019, which had a reference price of $26, opened for trading at $38.50. For
(SPOT), which listed in April 2018, the reference price was $132 and the stock opened at $167.
A reference price is not the same as the IPO price in a conventional offering. In an IPO, the shares to be sold in the offering are exchanged at the stated price. But zero shares are traded at the reference price in a direct listing. As one IPO market observer told Barron’s, “the reference price is totally useless and always based on the last private market trades.”
In the company’s filings with the SEC, Asana disclosed that private market trading in its shares in August ranged from $14.24 to $28 a share, with a volume-weighted average price of $25.11. Trading averaged $17.26 a share in the quarter ended July 31, and $15.98 a share in the April quarter.
Write to Eric J. Savitz at [email protected]