Why the Direct Listing is on Life Support

Direct Listing

Almost as soon as Surf Air Mobility went public via direct listing in July, the aviation company’s stock price started to nosedive. 

The startup’s shares had been assigned a reference price, a guidepost for investors estimated from prices per share in recent private trades, of $20 on the NYSE. By the end of the first day, its share price had settled at $3.15. Just over a month later, it’s trading at around $1.50 per share.

Surf Air Mobility was the first significant direct listing in nearly two years—and its performance is unlikely to inspire confidence in the process. It’s likely to be one of very few in the near term, PitchBook reports.

In a shakier market where late-stage companies don’t have the cash runway they used to, founders are more incentivized than ever to secure the capital and big investors that come with the traditional IPO roadshow. Only the most desperate companies seem willing to take the direct listing plunge in this environment. Read more.

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