Nasdaq Direct Listing with Capital Raise
An innovative alternative for capital formation with a dynamic, market-based solution where supply and demand sets the price at which a company sells their shares
What is a Direct Listing with Capital Raise (DLCR) at Nasdaq?
A DLCR allows a company to sell newly issued shares in the Nasdaq opening auction on their listing day. The actual price the company receives for its share sale will be determined by a market-based price discovery solution. In a DLCR, any investor that wants to purchase shares will be able to do so in the opening trade, thereby expanding access and democratizing the offering process.
What is the difference between an IPO and Direct Listing with Capital Raise?
The DLCR offering is not replacing the traditional IPO, rather it adds a new innovative solution for capital formation, which may be appropriate for companies that prefer a dynamic, market-based solution where supply and demand set the offering price at which the company sells its shares. Similar to an IPO, a price range will be disclosed in the company’s registration statement. The opening trade can occur at a price up to 80% above or 20% below the range (with those calculations based on the top end of the range).
Learn how a direct listing is one alternative path to the public markets
Direct Listing with Capital Raise Enhancements
Nasdaq continues to innovate within the capital markets ecosystem and is excited to be the first market to enact meaningful enhancements enabling companies to conduct a DLCR. On December 2, 2022, the SEC approved Nasdaq’s proposal to optimize the prior rules for a DLCR. This new rule allows a company to sell shares in the opening auction on Nasdaq at a price outside of the range in their registration statement—up to 20% below and 80% above. Nasdaq has had extensive conversations with potential issuers and the capital markets ecosystem about this rule. We look forward to bringing this dynamic alternative solution for capital formation to the broader ecosystem.
Benefits of a Direct Listing on Nasdaq with Capital Raise
Proprietary Technology
Nasdaq’s best-in-class technology, the Bookviewer, provides a real-time view of order data during the initial pricing of the direct listing.
Market Based Pricing
Auction process for capital raise on the company’s first opening trade.
Democratization of Access
Any investor that wants to purchase shares will be able to do so in the opening trade.
Webinar: Understanding Nasdaq's Direct Listing with Capital Raise Amendment
This webinar provides an overview of the Direct Listing with Capital Raise rule and key differentiators. We are pleased that the SEC has approved Nasdaq’s proposal to optimize existing rules for a direct listing with a capital raise. This innovative new rule allows a company to sell shares in the opening auction on Nasdaq at a price outside of the range in their registration statement—up to 20% below and 80% above.
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This webinar provides an overview of the Direct Listing with Capital Raise rule and key differentiators. We are pleased that the SEC has approved Nasdaq’s proposal to optimize existing rules for a direct listing with a capital raise. This innovative new rule allows a company to sell shares in the opening auction on Nasdaq at a price outside of the range in their registration statement—up to 20% below and 80% above.
Videos
Learn More about Direct Listings
Direct Listing with Capital Raise FAQs
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Nasdaq’s best-in-class technology, the Bookviewer, provides a transparent real-time view of order data. In a DLCR, Nasdaq’s Bookviewer gives the lead Underwriter access to the full order book on their desktop.
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Similar to an IPO, a price range will be disclosed in the company’s registration statement. The opening trade can occur at a price up to 80% above or 20% the registration statement price range (with those calculations based on the top end of the range). If the offering is priced outside the range disclosed in the company’s registration statement (but within the permitted DLCR range), the issuer must confirm to Nasdaq that no additional disclosures are required based on the actual price.
Nasdaq’s suite of DLCR tools and proprietary auction technology helps to provide for control and data transparency to mitigate volatility.
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While the company will sell shares directly to the public in the Nasdaq opening auction and not through the underwriter, companies will need to retain a bank as an underwriter with respect to the sale of shares by the company and identify that underwriter in its registration statement. This investment bank will act as a selling agent in the offering and will be subject to underwriter liability.