Evangelists promote direct listings as a better way to go public because companies can get the same result without selling a bunch of stock — and diluting existing shareholders and employees. Direct listings also offer a steep discount for new investors, who typically get the benefit of any immediate stock pop.
Venture capitalists and bankers say that almost every tech company pursuing a public offering is considering a direct listing.
Because companies still can't raise cash in direct listings, many will still choose IPOs, but with less restrictive lockup periods.a specific date when it plans to go public — Nov. 18, 2020. The day is significant because it marks "five years after the first people got stock options with 4 years of vesting," the company says on its strategy page.
GitLab CEO Sid Sijbrandij has told board members that he prefers a direct listing over an IPO, and the finance department has pulled together a presentation for investors laying out the benefits, according to people familiar with the matter who asked not to be named because they weren't authorized to speak on behalf of the company.
"At this time we are considering all our options, IPO or direct listing in 2020," a Gitlab spokesperson told CNBC in an email. "We want to go public next year as the market is well-aligned for us with massive opportunity and demand for our product."
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