Palantir, Asana both take unusual path to IPOs with direct listings

David Brancaccio, Nancy Marshall-Genzer, and Alex Schroeder Sep 29, 2020
Heard on: Marketplace Morning Report
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Palantir, a data analytics company, and Asana, a corporate software company, are both taking their stock public through direct listings. Spencer Platt/Getty Images

Palantir, Asana both take unusual path to IPOs with direct listings

David Brancaccio, Nancy Marshall-Genzer, and Alex Schroeder Sep 29, 2020
Palantir, a data analytics company, and Asana, a corporate software company, are both taking their stock public through direct listings. Spencer Platt/Getty Images
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COPY

Two technology firms, Palantir and Asana, will each start offering their stock to the public for the first time this week. Both are taking an unusual route to the market.

Marketplace’s Nancy Marshall Genzer spoke with “Marketplace Morning Report” host David Brancaccio, and the following is an edited transcript of their conversation.

David Brancaccio: Nancy, what is a direct listing?

Nancy Marshall-Genzer: It’s a quicker way for companies to start selling their shares to the public. It’s faster than a traditional initial public offering. Unlike an IPO, which can have a lockup period when some investors can’t sell their shares, in a direct public offering, the stock can start trading as soon as the markets open.

Brancaccio: What’s the calculation?

Marshall-Genzer: It is quicker, but that’s partially because there’s less scrutiny. There are no eligibility requirements or forms to fill out. That can make a direct listing riskier for traders buying these shares. And anyone can buy them, unlike in an IPO, where there are restrictions on who can participate. Also, the price of shares in a direct listing depends on demand. So there can be wild swings.

Brancaccio: And remind us about Palantir and Asana?

Marshall-Genzer: Palantir is better known. It’s a data analytics company, so it takes lots of data and puts it onto a secure platform where it can be analyzed. It does a lot of work for government agencies like the CIA and FBI. It’s also worked for ICE, helping track people at the border. That’s sparked protests at the company’s headquarters.

The other company is Asana. It’s a corporate software company that helps organize and manage the work of teams of employees. Neither Asana nor Palantir is profitable yet.

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