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Latham represented Spotify, the world’s largest global music streaming subscription service, in its groundbreaking direct listing, a “first-of-its-kind” transaction.

Direct Listings

Latham is pioneering the increasingly popular direct listing, an alternate method of becoming a public company.

What is a direct listing?

A direct listing is an alternative to an IPO that offers greater liquidity and flexibility to founders, early investors, employees, and other shareholders. A private company’s outstanding shares are listed on a stock exchange such as the NYSE or Nasdaq, without a primary or secondary underwritten offering. The company does not raise capital through the listing. Existing shareholders, such as employees and early-stage investors, are free to sell their shares on the exchange.  

Why choose a direct listing?

A direct listing offers certain advantages to companies looking to go public. In particular, a direct listing is well-suited for companies who have:

  • No immediate need to raise capital
  • A large existing shareholder base

Compared to traditional IPOs, advantages include: 

  • Pure market-driven price discovery
  • Greater liquidity for existing shareholders — no lock-up agreements
  • Equal access to information for all buyers and sellers

Latham’s top-ranked capital markets lawyers worked with regulators to pioneer the first direct listings and continue to lead the developing direct listing market. 

Learn More About US Securities Law

Commentary on the Law and the Lore documents some of the interesting US securities laws questions we have encountered. 

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