medium · Investment Banking rx-dcm-ecm
A technology company with $900 million in annual revenue chooses a Direct Listing instead of a traditional IPO.
Which of the following is a primary risk or trade-off associated with this decision?
- Total underwriter fees are higher due to complexity
- Insiders are forced into a 360-day lock-up
- Lack of price stabilization and 'Greenshoe' support
- The company cannot raise any new capital
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