TechFlow news — In a recent Unchained interview on July 10, when asked "Why did Coinbase choose a direct listing?", Jeff Roberts, senior reporter at Fortune, said, "It was clear that many early investors wanted to cash out—you know, a good way to cash out is to sell shares directly to the public, which is why Spotify chose a direct listing."
Jeff Roberts also noted, "It's a way of pushing back against Wall Street—after all, all those lawyers and bankers make their living off IPOs." He added that directly selling shares could make all insiders wealthy.
TechFlow了解到，a direct public offering (DPO) is an alternative to an initial public offering (IPO). Instead of working with investment banks to underwrite and issue new shares for fundraising, a company allows its employees and existing investors to convert their ownership stakes into tradable shares listed on an exchange.
A DPO does not involve issuing new shares, so there is no underwriting process, no need for underwriters, and therefore no dilution of existing equity.
Once listed, the public can buy shares, and existing investors can sell their holdings immediately without being subject to lock-up periods—which are required in traditional IPOs (DPOs have no lock-up periods). Spotify and Slack are examples of companies that chose to list on exchanges by bypassing traditional IPO procedures.
