A way for a company to become publicly traded by listing its existing shares directly on an exchange, without underwriters selling newly issued shares at a fixed offering price. It skips the traditional roadshow and price-setting process; the opening trade price is instead set by an exchange auction matching real buy and sell orders.
Direct listings save a company the underwriting discount and let existing shareholders sell immediately without a lock-up, but no bank guarantees a price or manages an order book — price discovery happens entirely in the open market on day one. That can produce more volatile early trading than a traditional IPO, since there's no underwriter greenshoe mechanism standing by to stabilize the price if it moves sharply.
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