Surf Air’s rough debut serves as cautionary tale for direct listings

Going public via direct listing can be a bit of a gamble. For Surf Air Mobility Inc., it proved to be more like a spin on the roulette wheel. When the stock finally began trading just before 3 p.m. Thursday in New York, it was on paper worth a quarter of the value expected the night before. While the reference price in a direct listing is merely an estimate of value — and a flawed one at that — the rocky debut could serve as a cautionary tale for other wanna-be public companies considering the route without the brand recognition direct listings typically accompany. For small companies looking at a direct listing, Surf Air’s CEO Stan Little has some advice: “Number one, make sure you have the money that you need to execute since you’re not raising money yourself,” he said on the floor of the NYSE Thursday. Despite the widespread view that it’s a cheaper and faster way to go public, only a handful of well-known companies like Spotify Technology SA, Slack Technologies Inc. and Coinbase Global Inc. have tapped the option to go public. The venture-backed regional air carrier with plans for electric planes opted for a direct listing after a SPAC deal was called off last year. While the company had reasons to go public, including a tie-up with Southern Airways Corp. and unlocking additional funding, its start isn’t the exit its backers were hoping for. Story has more.<br/>