Graduation Year


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Sean Flynn

Reader 2

Nishant Dass

Reader 3

Patrick Van Horn

Rights Information

2020 Alexis D Paff


In this paper, I carry out an empirical analysis of the pricing volatility of direct listings as compared to traditional IPOs. Direct listings solve an efficiency problem in the US going-public market, in which well-funded, late-stage firms lack incentives to pursue a public listing, which would create liquidity for preexisting shareholders and allow for a more diverse body of public shareholders. Direct listings have been allowed on the New York Stock Exchange since early 2018, and four firms, Spotify, Slack, Asana, and Palantir, have gone public through this new listing mechanism. While underwriters are heavily involved in the IPO process, serving the role as price stabilizers after the issue goes public, direct listings do not require a formal underwriter. Investment banks are often regarded as a necessity for stabilization in the going-public process, but this paper analyzes whether or not the overallotment option and lockup agreement in traditional IPOs actually leads to greater swings in price volatility for the first 60 days after an issue goes public.