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Illustration: Aïda Amer/Axios

The U.S. Securities and Exchange Commission finally approved on Tuesday a rule change that will allow companies doing direct listings on the New York Stock Exchange to simultaneously raise primary capital.

Why it matters: Despite the surge in interest in the last couple of years, direct listings have struggled to appeal to a wide swath of companies since many still need to raise capital when going public.

Background: Spotify's direct listing in 2018, which allowed the company's shareholders to begin trading their shares on the stock market, sparked growing conversations over the need for alternatives to the traditional initial public offering.

  • Common arguments have included the need for better pricing mechanisms because many companies find themselves with a first-day closing price much higher than the IPO price, also known as "leaving money on the table."
  • Lock-up periods preventing employees and some other shareholders from selling for months can also be viewed as another shortcoming of the traditional IPO process.

Between the lines: Some critics have also taken aim at the fees banks collect for underwriting IPOs, which the NYSE's new listing option eliminates.

  • Yes, but: Banks have still been highly involved in the handful of direct listings so far, collecting millions in advisory fees.

Go deeper

Jan 6, 2021 - World

New York Stock Exchange again says it will delist 3 Chinese telecoms

The New York Stock Exchange on Dec. 18. Photo: Noam Galai/Getty Images

The New York Stock Exchange again reversed course Wednesday and announced it would delist three major Chinese telecom companies — China Mobile, China Telecom, China Unicom Hong Kong.

The backdrop: The NYSE originally announced it would delist the companies on New Year's Eve in order to comply with a White House executive order. The exchange then reversed course late on Monday and said it would no longer delist the telecoms.

Dion Rabouin, author of Markets
Jan 5, 2021 - Economy & Business

FuboTV stock plummets after surging throughout 2020

Data: FactSet; Chart: Axios Visuals

After getting the coveted Rabouin bump following an interview with CEO David Gandler on the "Voices of Wall Street" podcast, fuboTV's stock has tumbled, dropping from a high of $62.00 on Dec. 22 to $24.24 on Monday.

By the numbers: The 61% share price decline has happened over just seven trading sessions during which the stock fell by an average of 8.8% a day, including three drops of at least 15%.

13 mins ago - Politics & Policy

Read: Pete Buttigieg's opening statement ahead of confirmation hearing

Pete Buttigieg, President Biden's nominee to be secretary of transportation, in December. Photo: Kevin Lamarque/AFP via Getty Images

Pete Buttigieg, President Biden's nominee to lead the Transportation Department, will tell senators he plans to prioritize the health and safety of public transportation systems during the pandemic — and look to infrastructure projects to rebuild the economy — according to a copy of his prepared remarks obtained by Axios.

Driving the news: Buttigieg will testify at 10 a.m. ET before the Senate Committee on Commerce, Science and Transportation. He is expected to face a relatively smooth confirmation process, though GOP lawmakers may press him on "green" elements of Biden's transportation proposals.