New York Stock Exchange Betting on New ‘Spotify Rule’ to Attract Unicorns
Direct listings would help NYSE land startups with billion-dollar valuations.
Attention unicorns: The New York Stock Exchange wants you, and they want you bad.
According to the Wall Street Journal, the NYSE is considering a change to its listing standards, to allow companies to have “direct listings”—or the ability to have their shares traded publicly without the sometimes messy fallout from an initial public offering (IPO). It would also let the companies avoid multimillion-dollar underwriting fees and allow insiders to sell their shares whenever they want without restriction.
This move, however, is pending a ruling by the Securities and Exchange Commission.
What the move’s really about is attracting so-called unicorns—or startups that have a valuation of $1 billion or more (like home-fitness company Peloton). Notes the Journal: “Approval by the SEC would remove an obstacle that prevents companies like Spotify from using direct listings to list on the Big Board[.]”
One analyst in the story refers to it as the “Spotify rule.” And it would be revolutionary for the NYSE, as it is in constant competition with Nasdaq for listings. One of the NYSE’s most recent major coups? Landing Snap Inc.
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