SA's Wall Street Breakfast: The rising sun
SEEKING ALPHA reports: It took over 34 years, but trading floors across Tokyo today erupted in ...
SEEKING ALPHA reports:
This isn’t your grandfather’s initial public offering.
In fact, foundations of the traditional IPO process are getting shakier in 2020 amid the plethora of SPACs and direct listings that are on the docket. And the SEC may have removed one of the last major incentives to conduct an IPO via the traditional methodology – raising capital.
In an approval late Wednesday, the SEC said that companies using direct listings will now be given the opportunity to raise capital during the process – the missing link and distinction between direct listings and the traditional IPO process whereby a company conducts a roadshow and solicits investor interest in new shares. The NYSE Vice Chairman was careful not to say this is the end of the regular process, “We are not trying to displace the IPO. We are trying to create more options for companies and investors seeking to tap into the public markets,” he said in the Reuters interview.
Spotify (NYSE:SPOT) is the poster child for the direct listing process, famously listing in 2018, but the procedure did not allow for the company to raise capital via the method. Other companies, like Palantir (PLTR) which just filed its S-1 this week, intend to also utilize a direct listing approach.
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