ZipRecruiter goes public: what to know about ZIP’s direct listing on the NYSE

By Michael Grothaus

May 26, 2021

ZipRecruiter is going public on the stock market today. But instead of going the route of a traditional IPO, ZipRecruiter will debut on the New York Stock Exchange as a direct listing, which means its current shareholders, not the company itself, are selling its shares. Here’s what you need to know about ZipRecruiter’s direct listing:

    What is ZipRecruiter? It’s an online job marketplace founded in 2010. The platform boasts that over 1 million employers have used it to hire, and 10,000 new companies subscribe to it every month.

    How is a direct listing different than an IPO? In an IPO the company itself is selling its shares to investors. In a direct listing, the company’s employees and current investors sell their own shares to investors.

    What is the starting price of the stock? There is none because a direct listing doesn’t use a bank as an underwriter that prices the initial shares. Instead, the stock exchange applies a reference price to the shares, but this reference price is just advisory. ZIPs reference price is $18, according to Barron’s.

    How many ZIP shares are there? There are 133.1 million shares in total—both Class A and Class B. Of that total, the direct listing will see 86,598,896 Class A shares go on sale.

    What is ZIP’s market cap? With a reference price of $18 per share and 133.1 million shares available, ZipRecruiter is estimated to be worth around $2.4 billion.

    Have other companies used direct listings? Yes. Coinbase, Slack, Spotify, Roblox, and Palantir have all gone public via direct listings.