The New York Stock Exchange (NYSE) said on Tuesday it had filed with the U.S. Se...
Venture capital investors have backed direct listings as a better way to price newly public shares. Direct listings also avoid restrictions on stock sales by insiders, which often includes venture capitalists, and are less costly than an IPO, in which companies pay banks to underwrite a share offering and to stabilize their share price if needed.
In this new direct model, all of the shares being offered by a company - so-called primary shares - are to be sold in the first trade to a variety of buyers. Stock owned by existing investors - referred to as secondary shares - can be sold throughout the first day of trading. The new model will make a direct listing more attractive to companies but it will not dislodge the IPO overnight as the most popular route to the public market, according to Greg Rodgers, a partner law firm Latham & Watkins who worked on the Spotify and Slack offerings.
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