Surf Air’s shares assigned $20 reference price by NYSE

Surf Air Mobility shares were issued a reference price of $20 by the New York Stock Exchange to guide investors when the stock starts trading Thursday in the first significant direct listing in almost two years. Unlike a traditional initial public offering in which shares are sold at the offer price before trading begins, the reference price in a direct listing is merely an estimate of their value, providing a price for trading to begin. Surf Air, located at the Hawthorne Municipal Airport in the Los Angeles area, is listing as IPOs are slowly rebounding from a slump that has lasted for more than a year. In listings on US exchanges this year, 97 companies have raised a combined total of $13.8b, compared with almost $19b at this point in 2022 and a record-setting $226b the previous year, according to data compiled by Bloomberg. Despite widespread interest, direct listings have been used by only a handful of well-known companies, such as Spotify Technology SA, Slack Technologies Inc. and Coinbase Global Inc. Most recently, eyewear retailer Warby Parker Inc. went public via a direct listing in September 2021. Surf Air launched its plan for a direct listing in the wake of a collapsed blank-check merger that would have taken the company public at a $1.42b valuation. In a direct listing, companies typically don’t raise fresh capital and existing investors can usually begin selling shares on the first day of trading without the lockup period restrictions of an IPO. Because banks don’t underwrite shares as they do in an IPO, direct listings also can save on banking fees and the time spent on an investor roadshow.<br/>