How Companies Get Listed on a Stock Exchange

When a brand you love files for an IPO, the business press treats it like a coronation. Headlines announce the valuation. Analysts debate the price range. But behind the spectacle is a regulatory process that takes months, costs millions, and determines how the company will operate for decades. Understanding how companies get listed on a stock exchange means understanding why brand companies make the decisions they do, from quarterly earnings pressure to supply chain transparency.

If you have ever wondered what actually happens between a company's decision to go public and the day its ticker appears on screen, this guide breaks it down. There are three main paths, each with different trade-offs.

Three Paths to Going Public

A company that wants to trade on a public exchange has three options: a traditional initial public offering (IPO), a direct listing, or a merger with a Special Purpose Acquisition Company (SPAC). Each path has different requirements, timelines, and consequences for the brand.

The traditional IPO is still the most common route. The company hires investment banks, files a registration statement with the SEC, pitches institutional investors on a roadshow, and sells new shares to the public. It raises capital but comes with underwriting fees and lockup restrictions.

Direct listings skip the underwriters. Existing shareholders sell their shares directly on the exchange. No new capital is raised, but the company avoids underwriting commissions and lockup periods. This works for well-known companies that do not need fresh cash.

SPAC mergers involve a shell company that already went public. The private brand company merges with the SPAC and inherits its public listing. This was popular in 2020 through 2023, but SEC rules adopted in January 2024 tightened disclosure requirements and increased liability, reducing SPAC volume significantly.

Path 1: The Traditional IPO

The IPO process is structured and sequential. Planning and executing an IPO is time intensive and typically takes 16 to 20 weeks or more from the organizational meeting to closing, according to Gibson Dunn's 2026 IPO Guidebook.

Step 1: Hire investment banks. The company selects underwriters, typically major firms like Goldman Sachs or Morgan Stanley. The lead underwriter manages the offering, sets the price range, and finds institutional buyers.

Step 2: File the S-1 registration statement. The company must file a registration statement on Form S-1 with the SEC, which must be declared effective by the SEC prior to pricing the offering. The S-1 includes the prospectus and additional regulatory information. Most companies submit a draft registration statement confidentially first, then publicly file it at least 15 days before the roadshow.

Step 3: SEC review and comment letters. The SEC's Division of Corporation Finance reviews the registration statement and issues comment letters. The company responds with amendments. This back-and-forth typically takes about 30 days for the initial review, though multiple rounds can extend the timeline.

Step 4: Roadshow. Company management pitches to institutional investors across major financial cities over one to two weeks. The goal is to build demand and determine the offering price. All confidential submissions must be publicly filed at least 15 days prior to commencement of the roadshow.

Step 5: Price the offering. The underwriter sets the final price the night before trading begins, based on demand gathered during the roadshow.

Step 6: Shares begin trading. The stock opens on the exchange. The underwriter may stabilize the price through purchases in the early days of trading.

The IPO raises primary capital. Companies use it for growth investments, debt repayment, acquisitions, or liquidity for existing investors. Going public affords a company access to capital, both at the time of IPO and on an ongoing basis. But it also brings quarterly earnings pressure, public scrutiny, and significant compliance costs.

For more on how public markets work, see our stock market explainer for brand enthusiasts.

Path 2: The Direct Listing

Direct listings are a simpler but narrower path. Existing shareholders sell their shares directly on the exchange. There are no underwriters, no new shares, and no new capital raised for the company.

The process works because the exchange runs an opening auction. The NYSE or Nasdaq publishes a reference price based on recent private-market transactions. Buy and sell orders aggregate in the pre-market, and the opening price reflects actual supply and demand rather than a banker's negotiated valuation.

Spotify pioneered this structure in 2018. Slack, Palantir, Coinbase, and Roblox followed. In 2026, Ionic Digital completed the largest direct listing since 2021, opening at $50 on Nasdaq and closing at $62.90, a 26 percent gain on its reference price. The bitcoin miner raised no new capital but gave Celsius Network claimholders a public exit route.

The advantages are clear. No underwriting commission, which can save $10 million or more on a mid-size offering. No lockup agreements, so employees and early investors can sell from day one. Market-driven pricing avoids the IPO "pop" that leaves money on the table.

But direct listings carry real risks. There is no underwriter to stabilize the price. No guaranteed capital. No roadshow to build institutional demand. The structure works only for companies with strong brand recognition, a large existing shareholder base, and no urgent need for cash. No company has completed a primary direct listing since the adoption of the rules permitting them in 2020 and 2021.

Path 3: The SPAC Merger

A SPAC is a shell company that raises capital through its own IPO with the sole purpose of acquiring an operating business. The SPAC typically has 18 to 24 months to complete a merger or must return capital to investors.

For a brand company, the appeal was speed. A SPAC merger could take a company public in four to eight months, compared to 16 to 20 weeks for a traditional IPO (and often longer in practice). The key SEC document is the S-4 proxy statement rather than the S-1 registration statement.

That speed came with a cost. SEC rules adopted in January 2024 realigned SPAC offering requirements to be closer to traditional IPOs. In practice, these rules have significantly increased transaction timelines, disclosure volume, and liability exposure, contributing to reduced SPAC utilization relative to 2020 to 2023 levels.

Many SPAC mergers also include a PIPE, or Private Investment in Public Equity. This provides additional capital from institutional investors alongside the SPAC's existing trust fund. The structure allows the combined company to fund growth while going public.

SPAC volume has dropped sharply since the 2021 peak. Companies that might have used a SPAC in 2021 are now more likely to pursue a traditional IPO or wait for better market conditions. The SEC's proposed 2026 offering reforms, which would treat deSPACed companies more like traditional IPO companies for Form S-3 eligibility, could further reshape this path.

Choosing an Exchange: NYSE vs NASDAQ

Once a company decides to go public, it must choose where to list. The two main US options are the New York Stock Exchange (NYSE) and Nasdaq.

The NYSE uses a Designated Market Maker (DMM) model, where a designated firm is responsible for maintaining fair and orderly trading. It is perceived as more prestigious and is home to many established consumer brands. Companies like Coca-Cola, Walmart, and Disney trade on the NYSE.

Nasdaq operates a fully electronic market with three tiers: Global Select Market (most stringent), Global Market, and Capital Market (lowest threshold, accessible for smaller companies). Tech brands like Apple, Microsoft, Alphabet, Amazon, and Meta trade on Nasdaq. Nasdaq may deny initial listing, or apply additional conditions, if necessary to protect investors.

Foreign companies can list American Depositary Receipts (ADRs) on the NYSE without conducting a full offering. A foreign company that is publicly traded on an international exchange can list ADRs on the NYSE, giving US investors access to shares without dealing in foreign markets directly.

Entry fees differ. Nasdaq Global Market charges $325,000 for initial listing ($80,000 for SPACs). NYSE listing fees vary based on shares outstanding. Both exchanges charge ongoing annual fees.

Listing Requirements: Financial Thresholds

Each exchange sets minimum financial and liquidity standards for listing.

NYSE requires a minimum share price (typically $4), a minimum market capitalization, and financial viability standards. Companies must meet one of several financial tests, including income, valuation/revenue, or pure valuation standards.

Nasdaq Global Select Market has the most stringent requirements, including high market value of shares held by the public and strong financials. Most large tech companies list here.

Nasdaq Capital Market has the lowest thresholds, making it accessible for smaller companies and early-stage brands. Requirements include $50 million in market value of listed securities or $4 million in stockholders' equity.

Direct listings face higher thresholds. Companies listing in connection with a Direct Listing must meet all of the criteria under at least one of the four standards. On the NYSE, a primary direct listing requires either $100 million in new shares sold in the opening auction or $250 million in aggregate market value of publicly held shares.

The S-1 Registration Statement

The S-1 is the most important document in an IPO. It is the public face of the company for regulators, institutional investors, and retail buyers. The registration statement includes the prospectus and a small amount of additional information that is not included in the prospectus.

Key sections of the S-1 include:

• Business description: What the company does, its markets, and its competitive position
• Risk factors: The specific risks that could harm the business or stock price
• Financial statements: Three years of audited financials, including balance sheets, income statements, and cash flow statements
• Management Discussion and Analysis (MD&A): Management's narrative explanation of financial results and trends
• Use of proceeds: How the company plans to spend the IPO proceeds
• Executive compensation: Pay arrangements for top executives
• Related party transactions: Business dealings between the company and its insiders

The SEC reviews the S-1 and issues comment letters. The company responds with amendments. This process can take three to six months. Financial statements must not be more than 134 days old at the time of effectiveness.

The SEC proposed transformative reforms in 2026 that would modernize Form S-1, expand incorporation by reference, and extend disclosure scaling to approximately 81 percent of all public companies. If adopted, these changes would make it easier and cheaper for companies to go public and stay public.

Brand Companies That Went Public

Several well-known brands have gone public in recent years through different paths:

• Reddit (RDDT) went public via traditional IPO on the NYSE in March 2024, pricing at $34 per share and raising $519 million
• Birkenstock (BIRK) went public via traditional IPO on the NYSE in October 2023, pricing at $46 per share
• Instacart (CART) went public via traditional IPO on Nasdaq in September 2023

Brand companies often choose NYSE for prestige and visibility. Tech brands often choose Nasdaq for its tech-heavy peer group. The same ticker can represent different companies on different exchanges, so always confirm the exchange when looking up a stock.

For a running list of brands going public this year, see our IPO Watch: Brands Going Public in 2026.

What This Means for Consumers

Understanding the going-public process helps you understand why brand companies make certain decisions after they list.

An IPO gives a company capital for growth, but it also creates quarterly pressure. Public companies must report earnings every three months. Analysts expect growth. Shareholders demand returns. This pressure can push brand companies to cut costs, raise prices, or compromise on values that were easier to uphold as a private company.

A direct listing gives existing shareholders liquidity without the quarterly pressure of raising new capital. But the company still becomes subject to public reporting requirements.

A SPAC merger was once a faster path, but post-2024 SEC rules have made it more rigorous. Companies that go public through a SPAC now face disclosure requirements closer to a traditional IPO.

When you buy a product from a publicly traded brand company, your purchase contributes to quarterly revenue. That revenue affects the stock price. That stock price affects the index funds in your retirement account. The connection between consumer behavior and public markets is more direct than most people realize.

To find out whether a specific brand is publicly traded, check our guide on how to find out if a brand is publicly traded or browse our company database.

FAQ

What is an IPO?

An IPO, or Initial Public Offering, is the process by which a private company sells new shares to the public for the first time, typically through investment banks (underwriters). The company files a registration statement with the SEC, pitches to investors on a roadshow, and lists its shares on a stock exchange.

How long does the IPO process take?

The IPO process typically takes 16 to 20 weeks or more from the organizational meeting to closing. The SEC review alone can take three to six months, including multiple rounds of comment letters and amendments. Companies can file confidentially first, which allows them to test market conditions before going public.

What is a direct listing?

A direct listing is an alternative to an IPO where existing shareholders sell their shares directly on a stock exchange. No new shares are created, no capital is raised for the company, and no underwriters are involved. Spotify, Slack, Palantir, and Coinbase all used direct listings. The structure works best for well-known companies that do not need to raise capital.

What is a SPAC?

A SPAC, or Special Purpose Acquisition Company, is a shell company that raises money through its own IPO to acquire a private operating business. The target company merges with the SPAC and becomes publicly traded. SPACs have 18 to 24 months to complete a merger or must return capital to investors. SEC rules adopted in January 2024 increased disclosure requirements and liability for SPAC mergers, reducing their popularity.

Sources

1. Gibson Dunn — "IPO Guidebook 2026" — https://www.gibsondunn.com/wp-content/uploads/2026/01/IPO-Guidebook-2026.pdf 2. SEC — "SEC Proposes Transformative Reforms to Help Public Companies Conduct Registered Offerings" (2026) — https://www.sec.gov/newsroom/press-releases/2026-46 3. BDO — "A Guide to Going Public in the United States" (February 2026) — https://www.bdo.co.uk/ 4. Investopedia — "IPO vs. Direct Listing: Differences and Advantages" — https://www.investopedia.com/investing/difference-between-ipo-and-direct-listing/ 5. CoinDesk — "Ionic Digital Jumps 26% in Nasdaq Debut" (July 2026) — https://www.coindesk.com/business/2026/07/29/ionic-digital-jumps-26-in-nasdaq-debut 6. Davis Polk — "SEC Proposes Reforms to Registered Offerings and Public Company Reporting Framework" (2026) — https://www.davispolk.com/

All brand ownership data verified through WhoBrands.com's research methodology. Last updated: July 6, 2026.