On Wednesday September 30th the New York Stock Exchange broke new ground by holding two concurrent NYSE Direct Listings — in Asana, Inc. and Palantir Technologies Inc. — along with 4 traditional IPOs, all on one day. The NYSE Trading Floor facilitated price discovery and liquidity for these trading events smoothly and with a high degree of transparency. Asana (NYSE: ASAN) and Palantir (NYSE: PLTR) highlighted NYSE’s ability to consolidate disperse trading interest in a single trade; PLTR’s opening auction was the largest auction ever for an IPO or new listing on NYSE.
Direct Listings allow a company to become publicly-listed without the traditional IPO process. In a Direct Listing, a company’s stock begins trading with an opening auction run by a Designated Market Maker (DMM) on the NYSE Floor, with the opening price set by the natural supply and demand submitted into the marketplace. The Exchange, in consultation with the company’s financial advisor, sets an initial reference price; as orders are submitted to the Exchange and buy and sell interest accumulates, the DMM provides indicative price ranges throughout the price discovery process.
Quote volatility is measured as the standard deviation of secondly returrns, aggregated daily here. The NYSE IPO Avg (excl SPACs) and NASDAQ IPO Avg (excl SPACs) are simple averages across all non-SPAC IPOs in August and September 2020. Similar results are found using medians or Winsorized means across non-SPAC IPOs.