Wise confirms plans for direct listing
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Wise confirms plans for direct listing
Money transfer firm Wise is to go public via a direct listing on the London Stock Exchange.
Coinbase IPO: Coinbase Lists Secondary Shares in Preparation To Go Public via Direct Listing
UPDATE: Coinbase announced today (02/25/21) that the company plans to go public via direct listing.
Alex looks at the recent private market share sales of Coinbase and breaks down if he thinks Coinbase is deserving of a sky high tech IPO valuation. The last tech company to IPO at a $100 billion+ valuation was Facebook at $104 billion. Coinbase held their secondary sjare sale via Nasdaq Private Markets, formally known as Second Market.
Coinbase valued above $100 billion, ahead of direct listing: https://www.axios.com/coinbase-valued-100-billion-direct-listing-9b43e316-7ff7-4f6a-a1db-4dc2481a93ee.html
This is an excerpt from episode 145 of Winner Take All. Watch the full episode here:
Originally Aired: 02/23/21
#Fintech #CoinbaseIPO #Crypto
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At Applico, we identify untapped, intrinsic assets that give existing enterprises an enormous advantage to spin-out new tech companies. WisdomTree licensed Applico’s Platform Insights Data Product to aid in the creation of the PLAT ETF.
Bill Gurley praises raising capital through direct listing
Bill Gurley, Benchmark General Partner, praised the SEC’s decision to allow the New York Stock Exchange’s plan to allow companies to raise cash via direct listings. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
Venture capitalist Bill Gurley on Tuesday cheered a change in the direct listing process approved by U.S. regulators, telling CNBC he believes it will “unquestionably” usher in the end of traditional initial public offerings.
Companies that go public on the New York Stock Exchange through a direct listing will now be able to raise new capital. Prior to the Securities and Exchange Commission adopting the rule, companies could only sell existing shares to public market investors.
Gurley, who led investments by Benchmark in Uber and Zillow, has become increasingly critical of the traditional IPO process. But he said Tuesday’s move by the SEC solidifies the direct listing as a better alternative.
“I can’t imagine, in my mind, when you can do a primary offering through a direct listing, why any board or CEO or founder would choose to go through this archaic process that has resulted in massive one-day wealth transfers straight from founders, employees and investors to the buy side,” Gurley said on “Closing Bell.”
The IPO process has been under the microscope in recent weeks after the massive one-day pops in shares of DoorDash and Airbnb. CNBC’s Jim Cramer called the pricing mechanism “broken” and “embarrassing.” And Verishop CEO Imran Khan, who helped take Alibaba public when he worked at Credit Suisse, told CNBC they demonstrated “an epic level of incompetency from the bankers.”
Indeed, Gurley said the traditional Wall Street firms who usher companies through the IPO process may be rankled by the SEC’s rule change. But for the companies themselves and for smaller investors, Gurley said direct listings offer major advantages, especially now that they can raise money in the process.
“In the future you’ll be able to go on Robinhood and if you want to participate in an IPO, you can,” Gurley said, referencing the popular stock trading app among young investors. “Let’s not let these intermediaries and gatekeepers hand allocate who gets this underpriced stock,” added Gurley.
New York Stock Exchange President Stacey Cunningham told CNBC earlier Tuesday she did not believe the direct listing rule change will lead to the end initial public offerings. But she said it is a crucial innovation for private companies breaking into public markets.
“Some of them will continue to choose a traditional IPO but others will have this as an alternative if they want to reduce their cost of capital and they want to have a democratized access to their company on the first day,” she said. “I do think there’s an improvement that is welcome in the IPO arena.”
Cunningham said she believes allowing companies to raise capital through a direct listing is not necessarily meant as a way to avoid investment banking fees associated with an IPO. “The banks are still providing services to companies when they choose to do a direct listing, and they get compensated for providing that value to them when they’re working with them,” she said.
Instead, she said choosing a direct listing while raising new funds is “about the cost of capital.” She contended it will better reflect market demand because every interested investor, not just large, institutional funds will be expressing interest toward available shares.
“Just think about all those examples when we see an IPO pop on the first day, and there are shares allocated the night before and it gets priced at a certain level,” she said. “Then the next day it’s up 100% and people say, ‘Well that’s a great IPO. Look how wonderful and exciting this company is.’ It’s not a great IPO if you were the one that sold shares the night before because you could’ve gotten a much better price if everybody was participating in that offering.”
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IPOs, Direct Listing & SPAC – How Private Companies can become Public
Understand the key differences between different ways a private company can become public – IPOs, Direct Listing & SPAC. These are different demutualisation methodologies.
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The Direct Listing Process for Trading on NASDAQ and NYSE
The Direct Listing Process for Trading on NASDAQ and NYSE- NASDAQ has allowed for a direct listing although historically it has rarely been used. The process to achieve a direct listing on NASDAQ is substantially the same as OTC Markets with some key differences. This section will only discuss the differences. The biggest difference is that when completing a direct listing onto an exchange, the exchange issues a trading symbol upon effectiveness of the registration statement and filing of an 8-A, and the shares are then available to be sold by the selling stockholders at prevailing market prices.
An S-1 registration statement is a registration statement filed under the Securities Act of 1933. In order to qualify to trade on a national exchange, a company must also be registered under the Securities Exchange Act of 1934. This is not a requirement for OTC Markets. A Form 8-A is a simple (generally 2-page) Exchange Act registration form used instead of a Form 10 for companies that have already filed the substantive Form 10 information with the SEC (generally through an S-1). When the Form 8-A is for registration with a national securities exchange under Section 12(b) of the Exchange Act, the 8-A becomes effective on the later of the day the 8-A if filed, the day the national exchange files a certification with the SEC confirming the listing, or the effective date of the S-1 registration statement.
An NYSE direct listing follows the same process on NASDAQ; however, previously NYSE rules required an underwriter to determine or at least sign off on valuation in connection with an initial public offering. On February 2, 2018, the SEC approved a proposed rule change by the NYSE to allow a company that had not previously been registered with the SEC and which is not being listed as part of an underwritten initial public offering, to apply for and if qualified, trade on the NYSE. The amended rules modify the provisions relating to qualification of companies listing without a prior Exchange Act registration in connection with an underwritten initial public offering and amend Exchange rules to address the opening procedures on the first day of trading of such securities.
The rule amendments modify the determination of market value such that the NYSE has discretion to determine that a company meets the minimum market value requirements for a listing based on an independent third-party valuation. #LegalAndComplianceLLC
Wise confirms plans for direct listing Money transfer firm Wise is to go public via a direct listing on the London Stock Exchange. Coinbase IPO: Coinbase Lists Secondary Shares in Preparation To Go Public via Direct Listing Coinbase IPOUPDATE: Coinbase announced today (02/25/21) that the company plans to go public via direct listing.Alex looks…