Law Commons^™

Move Over Ipos: Unicorn Direct Listings May Be The New Mythical Beasts In Town, Tatum Sornborger

Fordham Journal of Corporate & Financial Law

Most people think of “going public” as an Initial Public Offering (IPO), but as IPOs have boomed and busted over the past decade, the direct listing has emerged as an unconventional but viable way to raise capital. The direct listing approach was uncovered by one rebellious “unicorn,” a term used to describe privately held companies with valuations exceeding one billion dollars. By circumventing the traditional IPO process, Spotify prompted both the SEC and major stock exchanges to examine direct listings and promulgate rules for future offerings. Though these rules are still developing, companies now have a clear path to follow …