Thursday, January 13, 2022

Going Public: How Are Direct Listings Different from IPOs?

 An initial public offering (IPO) is the first public sale of stock shares by a private company. IPOs are important to the financial markets because they help fuel the growth of innovative young companies and add new stocks to the pool of potential investment opportunities.

When a company files for an IPO, new shares are created, underwritten by a bank, and sold to the public. But that’s not the only way for a company’s stock to become publicly traded. When a company uses a direct listing, typically only existing shares are sold to the public on a stock exchange — no new shares are issued, and no underwriters are involved.

There were more U.S. IPOs in the first half of 2021 than there were in all of 2020, which was also a record year.1 The number of direct listings has ticked up, too, but there were just three in 2020 and four in the first half of 2021.2

Thursday, January 6, 2022

Looking Back, Looking Forward

 The month of January is named after the Roman god Janus, who was imagined as having two faces: one looking toward the past, the other looking toward the future. In a similar manner, economists look in both directions to better understand economic trends. But instead of two faces, they use economic measures called indicators.

The most commonly studied indicators are tracked by The Conference Board, which publishes composite indexes of leading, lagging, and coincident indicators.

Gauging the Future

Not surprisingly, leading indicators garner the most attention, because they may forecast the future direction of the economy.