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The typical method of going public has traditionally been an initial public offering (IPO), whereby a company works with an underwriter syndication to establish a price at which shares will be offered to the public before listing them. The purpose of this paper, however, is to evaluate whether IPOs are truly the best method for taking a company public. To answer this question, at least partially, we explore the upsides and downsides of a direct listing using the music streaming company Spotify (NYSE: SPOT) as a case study. Having officially registered to go public with the SEC and direct listed on April 3, 2018 with $149.01 closing price and a $26.5 billion market capitalization, Spotify becomes the first major private company to list its shares directly to the public on the NYSE without using an underwriter. Although direct listings come with their fair share of risk, this study suggests that a direct listing can benefit large private companies by eliminating the losses associated with underpricing, offering quick liquidity to the firm and its current shareholders, and decreasing per share dilution. As Spotify’s direct listing is successful, it could send ripples across Wall Street and the broader world of tech unicorns that alternative changes how large private companies choose the way of going public.

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