Going public without the bookbuild. Counsel for the company that wants a listed, liquid stock on its own terms, where the market sets the opening price and the registration, eligibility, and disclosure work still has to be done right.
A direct listing registers shares for resale by those who already own them, not for sale by the company, and the distinction runs through everything that follows. There is no underwriting agreement, no overallotment option and no stabilizing bid on the first morning; a financial adviser helps the designated market maker set a reference price, and the opening auction does the rest. Since the NYSE won approval for primary direct floor listings in December 2020, Nasdaq following in 2021, a company may also sell new shares into that auction within a price range disclosed in the registration statement.
The disclosure is identical to an IPO's. The liability is not. Registered shares and shares already free under Rule 144 start trading together, so a buyer often cannot show which it bought, and in 2023 the Supreme Court held that Section 11 reaches only shares traceable to the challenged registration statement. That comforts directors and sends plaintiffs to Rule 10b-5.
We advise companies and their holders on whether the route fits the cap table, prepare the Form S-1 and Form 8-A, and settle who may sell on day one.
The threshold decision is which route best fits the company's capital needs, shareholder base, and the day-one liquidity it wants: a conventional direct listing, a primary capital-raise direct listing, or a traditional IPO. We test it before the path is set.
Eligibility and listing-rule analysis for the chosen venue, covering distribution and float criteria, governance requirements, the listing application, and the market-maker and financial-adviser arrangements a direct listing requires.
The registration statement and prospectus that make existing shares tradeable. We draft the disclosure, build the selling-shareholder framework, and carry full IPO-grade disclosure standards into a resale registration.
Coordination of the market-driven opening, including reference-price mechanics, the exchange's opening auction process, and the disclosure and adviser interaction that sit around price discovery on the first day of trading.
The resale picture for existing holders, meaning who can sell, when, and under what conditions, including any company-imposed restrictions, securities-law resale limits, and the presence or absence of a customary lock-up.
Once listed, the company reports. Periodic and current reporting, material-event disclosure, insider-trading controls, and the governance standards the exchange and securities regulators expect of a newly public issuer all begin on day one.
The registration statement is a Form S-1 covering resales by existing holders, paired with a Form 8-A that registers the class under the Exchange Act and starts the proxy and Section 16 regimes at listing. Confidential submission and Rule 163B testing-the-waters meetings are available, but with no roadshow, an investor day stands in.
Nobody has agreed to trade at the reference price. On the NYSE the designated market maker sets it, with the financial adviser's input, from recent private-market trades or, failing those, a valuation, and publishes it the evening before. The auction may clear far from it, and with no underwriter, no stabilizing bid catches a fall.
Freedom to sell at the open belongs to holders named in the resale registration and to non-affiliates past the Rule 144 holding period. Officers, directors and ten-percent holders remain affiliates, so their sales outside the registration stay inside Rule 144's volume limit, the greater of one percent of the class and four weeks' average volume.
On the NYSE a primary direct floor listing must either sell $100 million of new shares at the open or show $250 million of market value across the shares sold and those already public, measured at the bottom of the disclosed range. Nasdaq's rule is similar; the range is a commitment, not a forecast.
For a selling-shareholder listing the NYSE wants $100 million of publicly held shares supported by an independent valuation and by recent private-market trading, or a $250 million valuation where there has been no sustained private trading, plus 400 round-lot holders and 1.1 million publicly held shares. Those counts come off the cap table.
Section 12(b) registration switches on Section 16: officers, directors and ten-percent holders file Form 3 by the effective date, report trades on Form 4 within two business days, and disgorge the profit on any purchase and sale inside six months. Under Rule 16a-2 a purchase in the six months before listing matches a day-one sale.
Before anything is filed, the question is whether this route fits at all: capital needs, the shape of the shareholder base, and the day-one liquidity the company actually wants. The choice among a conventional direct listing, a primary capital-raise direct listing, and a bookbuilt IPO is made against the cap table rather than against fashion.
A registration statement goes to the SEC carrying full IPO-grade disclosure, but it registers existing holders' shares for resale rather than a syndicate's allocation. Comment letters are answered, the selling-shareholder framework is built, and the record is prepared to survive diligence with no underwriter standing between issuer and market.
The exchange work runs alongside the registration: distribution and float criteria, governance requirements, the listing application, and the market-maker and financial-adviser arrangements the venue's direct-listing rules demand. Effectiveness of the registration and approval of the listing must land together, because one without the other is a stalled debut.
There is no pricing call the night before. A reference price is published, orders build, and the exchange's opening auction discovers the first trade, with holders often free to sell from that minute if there is no customary lock-up. Continuous-reporting life begins at the cross, and the disclosure machine built during registration takes over.
In a direct listing no one prices your company the night before. The market does it at the open, and the preparation is everything.
A direct listing admits a company's shares to an exchange by registering existing holders' shares for resale rather than by selling new shares through underwriters. The company files a registration statement on Form S-1 that the SEC reviews as it would an IPO prospectus, registers the class under the Exchange Act on Form 8-A, and meets the exchange's listing standards; on the first morning a designated market maker, advised by the company's financial adviser, publishes a reference price and the opening auction discovers the first trade. There is no underwriting agreement, no overallotment option and no stabilization. Since the NYSE's primary direct floor listing rule was approved in December 2020, followed by Nasdaq's in 2021, the company may also sell new shares in that opening auction within a price range disclosed in the registration statement.
Several things are missing and one is added. Gone is the underwriting discount, which runs to seven percent on a conventional IPO and is replaced by an advisory fee. Gone too are the bookbuild, since the opening auction prices the stock, and the overallotment option with its stabilizing bids. The 180-day lock-up exists only if the company imposes one. Added is a question of liability. In an IPO every share sold on day one came from the registered offering, so Section 11 applies to all of them. In a direct listing registered shares and shares already free under Rule 144 trade together from the first print, and the Supreme Court held in 2023 that a Section 11 plaintiff must trace its shares to the registration statement, a burden many buyers cannot meet. The registration statement, the SEC review and the listing standards are otherwise the same.
Yes, since the SEC approved the NYSE's primary direct floor listing in December 2020 and Nasdaq's direct listing with a capital raise in 2021. On the NYSE the company must either sell at least $100 million of new shares in the opening auction or show that the shares it sells plus the shares already publicly held are worth $250 million, measured at the low end of a price range it discloses in the registration statement. The auction must then clear within the tolerance the exchange rule allows around that range, or the listing does not proceed that day. The company's shares sell alongside the existing holders' shares in the same auction, so the question for the board is less whether capital can be raised than whether the price discovery of an auction is preferable to the certainty of a bookbuild for the amount it needs. For a large raise with a thin private-market record, a conventional IPO is often still the answer.
A Form S-1 registration statement covering the existing holders' resales, reviewed by the SEC staff on the same timetable and to the same standard as an IPO, together with a Form 8-A registering the class under Section 12(b) of the Exchange Act so the shares can be listed. The S-1 carries audited financial statements for two years if the company is an emerging growth company and three otherwise, a selling-shareholder table or a generic description of the selling holders, and the full set of risk factors and management discussion. It may be submitted confidentially, but because there is no roadshow the public filing must be made at least 15 days before the requested effective date. On effectiveness the company becomes a reporting issuer, with its first Form 10-Q due within 45 days of the effective date or of the quarter's end, whichever is later, and Form 8-K events on a four-business-day clock from the first trade.
Often not in the customary underwriter form. A traditional IPO typically comes with a contractual lock-up restricting insider sales for a set period after pricing. A conventional direct listing frequently has no such underwriter-imposed lock-up, which means existing shareholders may be able to sell from the first day of trading, subject to securities-law resale rules and any restrictions the company itself has put in place. We map the resale and selling-shareholder mechanics so the company and its holders understand who can sell, when, and under what conditions.
Yes. We work from Chicago, London, and Dubai and advise on listings and offerings across major and international venues, coordinating locally admitted listing counsel where a venue's rules require it. A direct listing's eligibility criteria, opening-price mechanics, and continuing obligations are set by the chosen exchange, so the venue decision drives much of the structuring, and cross-border listings layer additional rules that we coordinate across jurisdictions.
Twelve to eighteen months before the intended listing date, for three reasons that each run on their own clock. The financial statements must be audited to PCAOB standards for two or three years, which is often a re-audit. The NYSE's $100 million test wants evidence of private-market trading, so a company whose shares have never traded on a secondary platform may need a tender offer or an organized secondary a year out to create the record, and it needs 400 round-lot holders at listing. And Rule 144 holding periods have to have run for the non-affiliate holders who are meant to supply day-one liquidity, which means knowing when each tranche of stock was issued and whether it was paid for in full. Counsel brought in once the financial adviser is hired can execute the listing; counsel brought in earlier can make it possible.
The conventional underwritten route to a public listing, through registration, the bookbuild, underwriting arrangements, and the diligence that carries an IPO to the bell.
Explore →Admission to major and international exchanges, with listing-rule analysis, eligibility and governance requirements, and coordination of local listing counsel where a venue requires it.
Explore →The reporting regime that begins at listing, from periodic and current reporting and material-event disclosure to insider-trading controls and the governance a listed issuer must run.
Explore →Going public by combination with a special-purpose acquisition company. We act for sponsors and targets on the merger, disclosure, PIPE financing, and post-closing reporting.
Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
One partner is accountable for the whole matter, and you have that partner's direct line. Chicago, London, and Dubai work to the same standard.