Direct Listings on the NYSE
In today's world, technology drives constant change, and businesses need even more flexibility and transparency to meet evolving customer, talent and market demands.
Going public is a powerfully effective solution for these challenges, but an IPO is no longer a one-size-fits-all path to public. That’s why the NYSE is working closely with issuers, regulators and the global market community to meet the new landscape of market demands, without compromising our high standards and commitment to excellence.
The result is the NYSE Direct Listing. Benefiting from our unique market model, companies that pursue a direct listing can choose to decouple capital raising from becoming a public company. In a direct listing, the full liquidity of the market values a company on day one without temporary constraints -- no reduced allocations or required lockup periods. This uninhibited price discovery reduces the cost of capital and democratizes access and opportunity for all investors.
Direct listings are just one of the ways the NYSE is using innovation to drive opportunity for modern businesses.
Decouples capital raising from public offering
Lower cost of capital and no forced timeline
Full and equal transparency
Democratized access to information
Level playing field for all investors - no allocations, no lock up periods
Plus, all the premium benefits of being a NYSE listed company
Financial Advisor Roles
Financial advisors are not required to underwrite an initial price like a traditional IPO, but they are essential in consulting alongside with the NYSE to set the reference price for Day 1.
Day 1 has an extensive price discovery process with a Designated Market Maker (a model unique to the NYSE) on the trading floor, who determines the opening price based on buy and sell orders in consultation with the financial advisor, using the reference price as a starting point.
Flexibility on the direct listing process allows a company to go effective without a waiting period after filing their S-1. Previous listed companies have utilized this feature to opt for an Investor Day in lieu of a Roadshow.
Public Access and Transparency
The direct listing provides access and opportunity for all investors, democratizing public company offerings even further than before.
Day 1 Trading
With the unique market model able to execute such an offering, NYSE Direct Listings have traded with superior market quality in both lower volatility and tighter spreads on Day 1 compared to IPOs*.
Slack and Spotify, listed on the NYSE, ranked among the largest opening trades in the history of the US markets.
Only at the NYSE
The NYSE is the only exchange that has launched a direct listing and is currently working with the SEC to expand accessibility to further develop this approach.
The NYSE is the only exchange to provide a Designated Market Maker to minimize volatility and discover market demand price assessment with unparalleled precision.
*NYSE and Nasdaq averages include all Tech IPOs from 2018-2019 YTD Volatility
A listing is the listing of a private company without an underwritten public offering or issuance of new shares. Unlike a traditional IPO, a direct listing:
The new proposal is aimed at (a) enabling more companies to use a direct listing and (b) allowing for an optional capital raise. Under the new proposal:
A company can qualify for a direct listing with at least 400 round lot holders and:
A company with less than 400 round lot holders can be given a grace period to meet the minimum round lot requirement if it: