Oleg Zabluda's blog
Thursday, January 17, 2019
Unlike a traditional IPO, a direct listing issues no new shares. The company going public sets its own market for the sale of shares by existing holders—founders, investors and employees—then finds buyers at an agreed upon price using market makers at an exchange like Nasdaq or the New York Stock Exchange. Investment banks hired by the listing company don’t work to keep the price stable in its first 30 days, another departure from the norm. And while shareholders such as employees have to wait for a lockup of typically six months with a traditional IPO, with a direct listing there’s no wait—anyone can sell.

Another big difference: Because a direct listing issues no new shares, the company going public doesn’t make money off the event.


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