Banks Battle for Fees as Slack Chooses Direct Listing Over IPO

Wall Street had good reason to be anxious last year when music streaming company Spotify Technology SA did a so-called direct listing, putting shares on the market without opting for a traditional initial public offering. Underwriting and advising on IPOs are among the biggest fee generators for the biggest banks, and it suddenly looked like companies had a new, cheaper alternative. Now another hot tech company, Slack Technologies Inc., is giving a direct listing a try on June 20. Wall Street is about to find out how afraid it should be.

A direct listing differs from an IPO in ...