One question is: If you buy stock in a direct listing, and the stock drops and you have complaints about the company’s disclosure, do you get to sue under section 11 (because it’s basically an IPO), or do you have to sue under section 10 (because it is not actually an IPO)?
Slack Technologies Inc. went public through a direct listing in June 2019. It shot up to $38.62 on its first day of trading, and then fell to as low as $20.13 by November. (It was acquired by Salesforce Inc. for about $45 in cash and stock in July 2021.) People who bought early and saw the stock drop naturally sued, complaining that Slack’s disclosures were wrong. I don’t know what disclosures they had complaints about; that is rarely the point in these things. Instead, the important question was whether they get to sue under section 11 or not. An appeals court ruled that they did, but Slack appealed to the US Supreme Court, and today Slack won….
Source: Slack – Bloomberg
