Direct Listing of Securities: Going Public Without an IPO

Registration Requirements, New NYSE Valuation Criteria, Pros and Cons, Lessons From Spotify

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, May 23, 2018

Recorded event now available

or call 1-800-926-7926

This CLE course will examine the registration, valuation and listing process for direct listing of shares on the New York Stock Exchange (NYSE) without a prior or simultaneous initial public offering (IPO) registered with the Securities and Exchange Commission under the Securities Act of 1933. The panel will also discuss the pros and cons of direct listing vs. an IPO, the new NYSE direct listing criteria, and lessons from the recent Spotify offering.


Traditional methods of corporate finance have been disrupted in recent years, as more companies choose to remain private and no longer view an IPO as necessary for capital raising. Many unicorns (privately-held startup companies with current valuations of $1 billion or more) have well-known brands and adequate capital without undertaking an IPO. A company might still favor having a class of securities listed on a securities exchange to provide it with acquisition currency and a basis for valuation of the company, and to provide existing shareholders with liquidity, assuming that a trading market develops.

A U.S. or foreign-domiciled company may choose to register a class of its securities under Section 12 of the Securities and Exchange Act of 1934 (1934 Act) and list its stock on a national securities exchange without undertaking an offering of its securities registered under the Securities Act of 1933 (1933 Act) at the same time. It can do that by preparing, filing and clearing with the SEC a registration statement on Form 10 (for U.S. issuers) or Form 20-F (for foreign issuers) [Spotify filed a F-1]. Counsel should have a thorough understanding of the filing and follow-up reporting requirements under the 1934 Act and NYSE continued listing requirements for a reporting company under the 1934 Act vs. company undertaking an IPO.

Direct listings bypass some elements of the cumbersome and costly investment banking and underwriting process that is part of the traditional IPO. Partly to facilitate a direct listing by Spotify, the SEC recently approved an NYSE proposal to provide additional valuation mechanisms for directly listing the resale of securities of previously private companies on the Exchange. Among other changes, the new rule modifies the provisions relating to the conditions for listing companies without a prior 1933 Act registration in connection with an underwritten IPO, subject to specific valuation requirements.

Listen as our authoritative panel examines the registration and listing requirements associated with the direct listing of securities on a public exchange. The panel will also discuss the recent amendment to the NYSE rules and the pros and cons of direct listings, including the recent Spotify filing (panel has no role in that transaction).



  1. Impact of abundant private equity capital on traditional IPOs
  2. Direct listings vs. IPOs
    1. Underwriting
    2. Registration
    3. Subsequent filings
  3. Amended NYSE listing requirements
    1. Valuation based on private placement
    2. Valuation by independent third party
    3. Trading procedures
  4. Pros and cons of direct listings


The panel will review these and other challenging issues:

  • What are the advantages and disadvantages of undertaking a direct listing vs. an IPO, or no listing at all?
  • What are the SEC registration requirements for a direct listing, and what are the ongoing filing requirements?
  • How might the new listing rules adopted by the NYSE and approved by the SEC affect direct listings going forward?
  • What are the new valuation criteria for an NYSE listing?


Partigan, John
John C. Partigan

Nixon Peabody

Mr. Partigan concentrates his practice in federal securities law matters and mergers and acquisitions. His mergers...  |  Read More

McLean, Deborah
Deborah J. McLean

Senior Counsel
Nixon Peabody

Ms. McLean is a member of the firm’s Public Company Transactions team. She represents public and privately held...  |  Read More

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