2018-01-08 10:37:00 Mon ET
stock market gold oil stock return s&p 500 asset market stabilization asset price fluctuations stocks bonds currencies commodities funds term spreads credit spreads fair value spreads asset investments
Spotify considers directly selling its shares to the retail public with no underwriter involvement. The music-streaming company plans a direct list on NYSE in lieu of a hot IPO. This alternative procedure can be cheaper, faster, and less legally risky to the issuer. The issuer may then lose its first-day price run-up in a hot IPO, which seldom benefits anyone apart from the institutional investors who receive an initial allocation of shares. In contrast, most startups file for an IPO through investment banks. These underwriters round up institutional investors to buy the issuer's fresh shares in order to establish a fair market price. Through a promotional roadshow, the underwriters commit to covering these new shares in their due diligence and fair valuation. The underwriters receive a considerable bounty in the order of 3%-5% of the IPO price (e.g. $300 million fee-payment to Alibaba's underwriters).
As cash-rich companies such as Spotify, Uber, and Airbnb have little incentive to raise capital via IPOs, these cash cows prefer to directly list on stock exchanges. Spotify can thus bypass firm commitment on the part of IPO-fee-driven investment banks. Nevertheless, the direct list may expose Spotify to bear raid by short-sellers, little underwriter liability, and less blue-sky transparency. This direct list option may attract more unicorns into the U.S. public stock market.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2020-10-27 07:43:00 Tuesday ET
Most agile lean enterprises often choose to cut costs strategically to make their respective business models fit for growth. Vinay Couto, John Plansky,
2020-04-10 11:33:00 Friday ET
Elon Musk envisions a bold fantastic future with his professional trifecta of lean startup enterprises SolarCity, SpaceX, and Tesla. Ashlee Vance (2015)
2018-10-19 13:37:00 Friday ET
PayPal earns great fintech reputation from its massive worldwide network of 250+ million active users. As PayPal beats the revenue and profit expectations o
2023-04-14 13:32:00 Friday ET
Calomiris and Haber delve into the comparative analysis of bank crises and politics in America, Britain, Canada, Mexico, and Brazil. Charles Calomiris an
2025-03-03 04:11:06 Monday ET
Is higher stock market concentration good or bad for Corporate America? In recent years, S&P 500 stock market returns exhibit spectacular concentrati
2018-09-25 10:35:00 Tuesday ET
Sirius XM pays $3.5 billion shares to acquire the music app company Pandora. This acquisition would form the largest audio entertainment company worldwide.