Like a DM vs. a $10 Papyrus greeting card... Direct Listings are generally cheaper and faster than IPOs. When a company chooses to take its stock public via DL instead of IPO'ing, they aren't creating new shares to sell. Owners of private stock (early investors and employees) unleash their existing shares to the public, so the company isn't raising any fresh cash. Yesterday, two companies took this simpler route to going public:
I'm different, yeah I'm different... DLs are rare, but it's even more unusual to see non-consumery companies do them. Only two well-known companies, Slack and Spotify, have DL'd (until yesterday). Their stocks soared on Day 1 since we're all familiar with what they do. Not so much for Palantir and Asana.
Going public is turning into an "à la carte" menu... and companies are taking advantage of the options. Before, there was 1 way to go public: the expensive prix-fixe menu IPO (no, you can't swap fish for the meatballs). Companies have been increasingly looking to DLs and SPACs to go public without paying fees to banks. Private companies will be following Asana and Palantir's stock to gauge the success of this new option.