December 6, 2019

Direct Listings: NYSE’s “IPO” Proposal – Controversial?

Last week, the NYSE proposed a rule change to allow listed companies to sell newly issued primary shares on its own behalf directly into the opening trade. As noted in this Davis Polk memo, this change could make the direct listing route more attractive to companies that need to raise capital, although it is an open question whether companies will be able to achieve the desired pricing & distribution of shares in a way comparable to that done in a traditional underwritten IPO.

Some are worried about the investor protection issues raised when the traditional IPO process is not utilized – but others note that there are a number of misconceptions about direct listings, including that a direct listing is even a “capital-raising” activity (see more from this Fenwick & West piece). We’re posting memos in our “Direct Listings” Practice Area – and here are some media pieces:

CNBC’s “NYSE proposes allowing companies to raise fresh capital in direct listings”
Financial Time’s “Exchanges pitch alternative to IPOs for corporate fundraising”
Reuter’s “NYSE seeks to let direct listings raise capital in IPO alternative”
WSJ’s “NYSE Wants to Let Companies Raise Capital Through Direct Listings”
Matt Levine’s “Soon Direct Listings Will Raise Money”

The Challenges of Being a Whistleblower!

This “Financial Times” article reveals how being a whistleblower can ruin your career. Here’s an excerpt:

These individuals worked for four of the most renowned names in the business world: EY, Deloitte,
KPMG and PwC. They are among 20 former employees from the Big Four accounting firms who
have spoken to the Financial Times about their experience of harassment, bullying and
discrimination in the workplace over the course of a year’s investigation into how these firms treat
whistleblowers within their ranks.

The FT identified a disturbingly common pattern in terms of how complainants were treated: most
initially felt ignored, then isolated and were eventually pushed out. Legal clauses aimed at silencing
them swiftly followed; nine of those interviewed said they were pressured into signing restrictive
non-disclosure agreements. Others were asked to sign but resisted.

Broc Romanek