Capital-raising in direct listings: wait, what?
Could the direct listing format withstand an injection of primary capital-raising? Yes, but not without complications.
The news that the New York Stock Exchange (NYSE) is mulling ways in which capital raising might be added into the direct listing toolkit has sparked a lively discussion among market participants as to the merits – and practicalities – of such a move.
It is a topic that had already been raised by direct listing pioneer lawyer Greg Rodgers of Latham & Watkins in a Goldman Sachs-hosted panel session on the subject back in October, but the concept has taken a step forward with the publication of NYSE proposals on the topic on November 26.
It is early days for the direct-listing method of going public – so far there have only been two such deals, for Spotify in 2018 and Slack in 2019.