IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify
The banks backing spotify made about as much from their "non IPO" compared to what they would have made from a traditional IPO so I don't think too many bulge bracket banks are worried about this trend.<p><a href="https://www.bloomberg.com/news/articles/2018-03-26/spotify-listing-disrupts-the-ipo-but-keeps-the-costs" rel="nofollow">https://www.bloomberg.com/news/articles/2018-03-26/spotify-l...</a><p>> Avoiding the lock-up period was a very important part of our decision to list Spotify directly, but there were also clear financial benefits.<p>This was listed as, I think, a positive but I see it as an extreme negative.  Why invest in your company if you don't have the conviction that it will be worth more 3-6 months from now.<p>> Think of it this way: the bigger the first-day gain in the closing price of your newly-issued stock, the higher the “cost” of your IPO. The investors who bought shares before the market opened pocket the gain in the stock price, instead of the company.<p>I think they are right but they really have no proof that they avoided the IPO pop discount.  They actually opened trading at $165.90 and closed at $149.01.<p>What's to say that if they followed a traditional IPO the wouldn't have gone public at the same price but had a bank to back stop their share price at that level.  The counter argument would be that they might have sold shares lower and had it float at $165.90 but we'll never know:)<p>one other thing they mention but should be highlighted is that most companies that go public sell  new shares to the public,  ie they raise money. Spotify didn't, as they didn't need money.  This is more common these days due to the huge amount of money sloshing around looking for returns > 4% but its still the exception for most companies that go public while still loosing money.