(Reuters) – Asana Inc

was valued at more than $4 billion in its New York Stock Exchange debut on Wednesday, after the workplace software maker went public through a direct listing rather than a traditional initial public offering.

Asana’s stock opened at $27 per share and closed at $28.80, up from a reference price of $21 per share set by the NYSE on Tuesday.

Prior to its public debut, Asana shares had traded in the private market at a weighted average price of $25.11 apiece in August.

The listing comes as the company’s software that supports corporate teams’ collaboration and organization is of particular value to customers during the COVD-19 pandemic, according to co-founder and Chief Executive Dustin Moskovitz.

“All these companies are moving to remote work for the first time, getting that clarity has become an ever more important business imperative. We’re well matched to the moment,” Moskovitz said in a telephone interview.

Asana was joined on Wednesday by Palantir Technologies , another company backed by Silicon Valley billionaire Peter Thiel, which also debuted on the NYSE through a direct listing, rather than a traditional initial public offering.

Existing investors can sell their shares directly to the market in a direct listing and the price at which shares are sold is not influenced by input from underwriting banks, amid criticism that shares in an IPO are often underpriced. Unlike an IPO, companies are not allowed to raise capital.

“In a traditional IPO where the underwriters may be pricing it at a particular price and then you see a 20%, 30% or sometimes even 50% increase in the stock, as the CFO you’re thinking, are you leaving money on the table?” Asana Chief Financial Officer Tim Wan said in an interview.

“In a direct listing you don’t have that phenomenon

Shares of Asana  (ASAN) – Get Report rose Wednesday in their first day of trading for the collaboration-software company after its direct listing on the New York Stock Exchange.

The San Francisco company’s co-founder and chief executive is Dustin Moskovitz, who also a co-founder of Facebook.  (FB) – Get Report

Asana recently traded at $28.49 on the NYSE, up 36% from its reference price of $21. The stock opened at $27.

In a direct listing a company and its current holders sell shares to the public. New shares are not created and no underwriters are involved.

Asana’s IPO was overshadowed by Palantir  (PLTR) – Get Report, a provider of data-analytics software to the government. Backed by venture capital icon Peter Thiel, Palantir also went public Wednesday with a direct listing on the NYSE.

Asana, started up in 2008, has 910 employees and produces software that competes with Atlassian’s TEAM Trello.

“We have experienced rapid growth in recent periods,” Asana said in its prospectus. Revenue registered $76.8 million and $142.6 million for fiscal 2019 and fiscal 2020, respectively, representing growth of 86%.”

Sales totaled $28 million and $47.7 million for the three months ended April 30, 2019 and 2020, respectively.

The company reported net losses of $50.9 million for fiscal 2019 and $118.6 million and fiscal 2020. It posted deficits of $15 million and $35.8 million for the three months ended April 30, 2019 and 2020, respectively.

As for risks, “we have a limited operating history at our current scale, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful,” Asana said.

In addition, it said, “we have a history of losses, and we may not be able to achieve profitability or, if achieved,

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The website home screen for Asana

Gabby Jones/Bloomberg


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