Surf Air opens trading at $5 a share in direct listing, then drops

Surf Air Mobility began trading at $5 a share and fell 37% from there in the first significant direct listing in the US in almost two years. Shares of the venture-backed regional air carrier with plans for electric planes closed at $3.15 Thursday in New York trading. At that price, the company has a market value of roughly $290m based on the outstanding shares indicated in its filings with the US Securities and Exchange Commission. “Now we can go out and get to work,” Stan Little, who is now Surf Air’s CEO, said on the floor of the New York Stock Exchange. “We’ll build the stock price and I have no doubt we’ll eventually get to where we thought we would be, it just won’t be today.” 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 after the collapse last year of blank-check merger that would have taken the company public at a $1.42b valuation. Before trading began, the exchange had assigned a reference price of $20. 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.<br/>