NYSE Listing

The main difference between an initial public offering (IPO) and a Direct Listing is the way in which the company’s shares are made available to the public.

• In an IPO, the company hires an investment bank or group of banks to underwrite and sell newly issued shares to institutional and retail investors. These investment banks are responsible for setting the initial price of the shares, marketing the offering, and providing liquidity support to the stock after it starts trading.

In contrast, in a Direct Listing, the company does not issue any new shares and does not work with any investment banks or underwriters. Instead, the company’s existing shares are listed on a stock exchange, such as the Nasdaq, and made available for trading directly to the public.

• Another key difference is the pricing of the shares. In an IPO, the underwriters determine the price at which the shares will be offered to the public. This price is usually based on a combination of factors, such as the company’s financial performance, growth potential, and demand from investors.

In Direct Listing, the company will let the market determine value based on supply and demand dynamics. This transparency may boost investor trust, attract a broader range of shareholders, and result in a more accurate valuation for the Company.

• Finally, in an IPO, the company typically raises new capital, which it can use to fund its growth and expansion plans.

In a Direct Listing, the company does not raise any new capital, but instead allows its existing shareholders to sell their shares on the open market.