Is Direct Listing a new norm?

Airbnb pgRy07
Jan 15 15 Comments

Slack is planning direct listing. After Spotify and Slack, do you think this could be the new norm in the tech industry? This would definitely make tons of ppl here REAL millionaires.

I personally think only very profitable companies can afford the risk of direct listing. But it seems easier than IPO since there is less restriction/ regulation.

What’s your thought?

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TOP 15 Comments
  • New DvVM00
    2nd company you’ve heard of and suddenly it’s a “new norm”? lol
    Jan 15 2
    • Airbnb pgRy07
      OP
      Because precedent matters DUH
      Jan 15
    • Pinterest xlsprnd
      Only need two data points to draw a trend line :)
      Jan 15
  • Datadog New Relic
    When a company doesn’t need money then it makes sense.

    https://www.theinformation.com/articles/slacks-financials-ahead-of-listing-plans
    Jan 15 3
    • Pinterest
      seenitall

      Pinterest

      PRE
      Yahoo
      seenitallmore
      If they don't need money, why do it? For their employees?

      What do you think about the pre-IPO stock trade companies?
      Jan 15
    • There are pros and cons, and liquidity, for all shareholders and the company itself, is a large pro.
      Jan 15
    • Spotify / Eng VnEB34
      Raising money seems dumb if your company is cash flow positive, has no debt, and has a sticky user base.

      Also, let employees leave. Why shackle them to lockups? Seems very much at odds with American financial liberty.
      Jan 19
  • Uber / Eng
    uberipo

    Uber Eng

    PRE
    Google
    uberipomore
    But you can’t raise money with direct listing, which renders this option unusable for Airbnb.
    Jan 15 5
    • Airbnb ugotserved
      Why? We’ve raised enough already.
      Jan 15
    • Uber / Eng
      uberipo

      Uber Eng

      PRE
      Google
      uberipomore
      Ok in that case make much more sense. But the board needs to think this way (not raising capital).
      Jan 15
    • Pinterest
      seenitall

      Pinterest

      PRE
      Yahoo
      seenitallmore
      If the original VCs want to cash out
      Jan 15
    • They can raise money later if they need it. IPOs are only the "initial" public offering. There can be lots of subsequent public offerings as well.
      Jan 15
    • Uber / Eng
      uberipo

      Uber Eng

      PRE
      Google
      uberipomore
      Yeah of course public company could raise capital in secondary offerings. That would usually result in significant drops in stock price though due to bad signaling.
      Jan 15
  • You’re asking a bunch of engineers what they think about the latest trend in IPOs. I would bet most people here haven’t the slightest idea of the factors that went into Spotify and slacks decision
    Jan 17 0
  • Airbnb AirJoJo5
    How would a direct IPO impact stock prices in IPO? From my reading a direct IPO doesn't create a new pool of stock. So- does that mean it's only the ISOs/RSUs and whatever notes the VCs hold? And the existing company held non-issued stock?

    Let's say for example a company unit of stock is valued at $100 via 409a. What happens in a direct IPO and what could one estimate for increase in value @ IPO?
    Jan 17 0