Certain facts were important to the court's conclusions. In this case, the company's initial reference price for the direct listing was $250 per share, the trading opened at $380 per share, and the stock sold up to $429 per share on the first day. There were no lockups restricting the trading of directors and officers, and nearly all of the director and officer defendants sold stock immediately, within the first two days of the direct listing. Nine days after trading began, and after the relevant sales of stock by the defendants occurred, the stock was trading down, between roughly $282 and $292 per share.

The plaintiff stockholder paired that trading backdrop with the assertion that the defendant directors and officers allegedly possessed material nonpublic information that was not fully disclosed to the public. Read more.

Source: Court of Chancery Addresses Fiduciary Duty Claims in the Direct Listing Context