Onda Digital Tv Under the amended GTC Code and listing rules aimed at improving corporate governance standards and practices, issuers listed in Hong Kong are subject to new requirements in the areas of corporate culture, independence and renewal of directors, diversity, nomination committee, shareholder communication and environmental reporting, social and governance (ESG). IPO activity has been sharply reduced in 2022 as broader markets have fallen sharply and investors continue to reflect on important economic uncertainties, including the first real inflation since the early 1980s, the impact of the Fed`s response, and significant geopolitical uncertainties. However, we see other factors that could be crucial for active DLs to reach levels that are not considered niches. First, a class action lawsuit filed by shareholders following Slack`s offer continued to be pursued in court. Its resolution could affect how DL remains attractive and how it works. Second, despite an update to listing rules that allow companies to raise funds for the company itself (and not just for its early investors and employees), the update presented risks to execution and made its use unlikely. On 10 December 2021, the Hong Kong Stock Exchange Limited (the “Stock Exchange”) published conclusions on the revision of the Corporate Governance Code (“GTC Code”), which are set out in Annex 14 (“Annex 14”) on listing rules and related listing rules. The amended GTC Code and Registration Rules come into effect on 1. January 2022 and the requirements of the new GC Code apply to the Corporate Governance Report (“GC Report”) for a fiscal year beginning on or after January 1, 2022, with the exception of certain exceptions listed in the table below. Direct listings (DLs), as most investors know them today, began listing Spotify in April 2018. Listing by this “Disruptor” technology has been celebrated as a kind of 2.0 for initial public offerings (IPOs) and promises an attractive path that private companies would increasingly choose when they go public. Despite initial enthusiasm, this did not happen. After Spotify was listed, another leading tech company, Slack, went public via a DL in 2019 and three more ran a DL in 2020.
Each of these listings encouraged DL product development as financial advisors, companies and investors gained experience. However, in total, only 14 companies (Table 1) have used an LD, representing 1.7% of all IPOs since March 31, 2018. When annual IPO volume nearly doubled in 2021 to 338 deals (excluding special purpose acquisition companies (SPACs)) and valuations in the technology sector were particularly robust, only six companies, accounting for 1.8% of IPOs, used the 2.0 IPO approach. While there are many differences between a DL and an IPO, we highlight three main differences: Source: S&P Capital IQ and company filings. 1. Market capitalization is calculated on the basis of the opening price and fully diluted shares outstanding at the opening. Values may vary due to rounding. Returns are calculated from the opening price of the first day until 23/08/22. (2) Watford and Slack yield calculated based on last price at time of purchase. Want more content like this? Start with the PwC Preference Center. Once broader markets stabilize and IPO activity picks up, we expect DLs to return as well. However, until companies can confidently use a DL to raise primary capital, it will remain a niche product for large, high-profile companies that have a lot of money or access to other sources of capital.
For this select group of aspiring DLs, we expect many to prepare for life as a public company and make the final decision on the path – IPO or DL – late in the process of preparing publicly traded companies.
