Direct listings offer alternative to IPO route

Author: John Crabb | Published: 18 Jan 2018

Swedish music streaming service Spotify has announced its intention to forego a traditional initial public offering (IPO) process and offer securities via a direct listing on the New York Stock Exchange.

The approach will allow the company to raise a significant amount of capital via private placements of existing shares, without the need to go public or rely on underwriters or investments banks to guide them through the increasingly expensive process.

Sources suggest that the process will gain momentum, and could well become the norm rather than the exception for tech unicorns. Direct listings are uncommon, but not unique. Several examples on the Nasdaq in the past by relatively small companies were unsuccessful in that the companies didn’t meet their objectives. ...



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