Categories Technology, U.S. Markets News

These 2 tech startups may follow Spotify’s method of direct listing over IPO in 2019

When Spotify (SPOT) opted for an untraditional method of direct listing in April, it raised quite a few eyebrows. Shareholders and the company management were barraged with questions, while many market observers remained skeptic over the consequences of a larger tech startup opting for this method.

However, the public listing turned out to be a success, with shares closing 12% higher than its reference price. Following the public listing, the Swedish company was valued at approximately $26.6 billion and the shares stabilized, unlike what was expected by some critics.

Picture Courtesy: Spotify

Though the hullabaloo around direct listings had died down since then, two popular tech companies may be opting this method next year. According to Recode, Airbnb and Slack may go for direct listing, though there has not been an official confirmation.

Direct listing is the method where pre-existing shares owned by shareholders, employees or promoters are offered to the public without the help of intermediaries including underwriters, investment banks or broker-dealers.

The elimination of middlemen helps in saving underwriter charges and other fees but comes with its own set of risks. There would be zero promotions and the listing stands vulnerable to high stock volatility.

Airbnb, which was last valued at $30 billion, is likely to go public by the end of next year or in early 2020. The company’s CEO Brian Chesky had reportedly met Spotify chief Daniel Ek a few months back to discuss direct listing.

Tencent Music files for IPO today as trade war put on hold at G20 Summit

Meanwhile, Slack is also mulling public listing, Recode reported. The enterprise workplace messaging company, only days ago, had hired Goldman Sachs to help with its public listing, though nothing is yet confirmed. The company, which has 8 million in DAU, is likely to go public in the second half of next year.

On the other hand, the two ride-hailing companies – Lyft and Uber – which had filed for public listing last week, will probably opt for the traditional IPO method.

 

Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference, and much more!

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top