Day-To-Day (DTD)

When an IPO is listed as day-to-day on the offering calendar, it means that the lead underwriter does not have sufficient orders in the book. IPOs listed as DTD are likely to be postponed.

Dead Cat Bounce

This is the brief rebound a stock makes after is has dropped significantly in price. It is likely caused by short sellers closing out positions rather than real buying.

Depositary Trust Company (DTC)

The DTC is essentially a clearing house between institutional buyers and sellers of securities and brokers. It allows institutional investors to seamlessly buy and sell stock using multiple brokers.

Direct Distribution

This is a form of spin-off where the parent company provides its existing stockholders with shares of the separated company, rather than offer them to the public. While the shares of the new company may become listed on an exchange, it is not an IPO, because there is no offering. Two well-known examples: TripAdvisor and PayPal were spun out of Expedia and eBay, respectively, via direct distribution.

Direct Listing (Direct Public Offering, DPO)

To avoid the cost of expensive lawyers and investment bankers, some companies try to go it alone by selling their shares directly to the public. This had been mainly used by small consumer products companies with loyal customers until Spotify went public via a direct listing in 2018 with a market cap of more than $25 billion.

Directed Share Program

When a company reserves a portion of the offering (typically up to 5%) to be sold to directors, officers, employees and affiliates. See Friends and Family.

Dual Class

Tech companies often sell the public shares that come with fewer votes. These Class A shares may have 1 vote, while insiders keep Class B shares with 10 votes apiece. This is often pitched as a way of protecting the founder’s vision from the vicissitudes of Wall Street. However, investors should be wary of giving up voting control. Google was one of the first large tech IPOs to have a dual-class IPO. Snap took it a step further, offering IPO investors shares without any voting power.

Dual List

A company may choose to list on two exchanges simultaneously. Foreign companies may find it beneficial to gain access to their own domestic capital market (and currency) as well as the more robust markets of the US.

Dual Track

This is where a company simultaneously files IPO paperwork and shops the business to potential acquirers. Private equity firms and corporate spin-offs more often run a dual track process, since an acquisition allows them to immediately realize a known return on their investment.

Due Diligence

As part of the process of taking a company public, the investment bankers and lawyers for the underwriters conduct an in-depth examination of the proposed IPO. They speak with management about the company’s prospects, strategy, competitors and financial statements. Information that is material to the company’s prospects must be disclosed in the prospectus. The lead manager on an IPO is often viewed as providing an implicit endorsement of the deal, based on their reputation and due diligence.

Dutch Auction

An alternative to the traditional negotiated pricing process used by underwriters to set IPO prices. This method requires the underwriter to solicit bids from potential investors. Investors indicate the number of shares that they want and the price that they are willing to pay per share. Shares are then priced at the lowest clearing price. Allocations are made with priority given to the highest bidders, first with regard to bid price and then according to bidded share size. Because the only considerations taken into consideration for allocating shares is the bid price and shares, this pricing method does not discriminate between institutions and individuals with regard to allocations. Investment bank W.R. Hambrecht became known for employing this method of going public.