The Rise of Non-Traditional IPOs: SPACs and Direct Listings

The disruption and uncertainty in the market caused by recent events has forced many companies to re-evaluate and re-assess their Initial Public Offering (IPO) approach. While 2020 started off with strong activity in IPO markets around the world, Q2 2020 activity dropped off by 48% in volume compared to Q2 2019. An interesting trend noted alongside the decrease in traditional IPOs has been the increasing number of companies using non-traditional routes to an IPO such as Blank Check IPOs and Direct Listings.

Click here to read this article that includes information on:

Blank Check IPOs or Special Purpose Acquisition Companies (SPACs)

• How a SPAC works
• Benefits of SPACs
• Challenges of SPACs

Direct Listing IPOs

• How a DPO works
• Benefits of a DPO
• Challenges and drawbacks of a DPO

Primary Direct Floor Listing

• A brief update: SEC recently approved a plan submitted by the New York Stock Exchange (NYSE) for a new type of direct listing called Primary Direct Floor Listing

Are SPACs and direct listings just a bubble or will this become mainstream? We would love to hear your thoughts after reading this article. Please connect with Weaver’s investment funds team on this and other related topics on our website or on LinkedIn.

Authored by Sindhu Rajesh, CPA, CFE, and Tigran Hovasapyan, CPA.