In Grabski v. Andreessen, C.A. No. 2023-0464-KSJM (Del. Ch. Feb. 1, 2024), the Delaware Court of Chancery declined to dismiss fiduciary claims against officers and directors of Coinbase Global, Inc. who sold shares in a going-public transaction. In the opinion, the court, which has in recent years decided a number of cases involving companies going public via de-SPAC mergers, addressed fiduciary principles in the context of another alternative to a traditional initial public offering: the direct listing.

Typically, companies go public via either an IPO, which generally involves a private company selling new shares to the public indirectly through an underwriter, or a de-SPAC merger, which generally involves a public shell company acquiring a private company and issuing new shares to the private company’s stockholders as merger consideration. Rather than pursing either of these options, Coinbase decided to go public using a direct listing.

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