medium · Investment Banking rx-dcm-ecm
What is the primary risk associated with a 'Direct Listing' compared to a traditional IPO?
- The inability for founders and early investors to sell their shares.
- The high cost of underwriting fees paid to the lead bookrunners.
- The lack of price stabilization and the absence of a 'Greenshoe' option.
- The requirement to issue a large amount of new capital, diluting existing shareholders.
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