Direct listing
A direct listing is a way for a company to go public by putting its existing shares directly onto an exchange for trading, without the traditional underwritten process of creating new shares and having buy and resell them to investors ahead of the first trade. Instead, existing , such as employees and early investors, are free to sell their shares directly to the public once trading opens.
Because there is no new being sold to raise capital in a classic direct listing, the company itself raises no money from the process, unlike a traditional . The opening price is set by matching buy and sell orders on the day trading begins, similar to how any opens, rather than being set in advance by through .
Direct listings appeal to established, well capitalized companies that do not need to raise fresh capital and want to avoid the underwriting fees, , and share allocation process of a traditional , letting existing holders sell directly into the market instead. Exchanges have since allowed direct listings to include a capital raise alongside the sale of existing shares, narrowing the gap with a traditional , though the core difference, no buying and reselling shares in advance, still defines the structure.