It looks like Spotify is finally ready go public after all. In the final weeks of December, the streaming platform filed to go public on the New York Stock Exchange in what looks to be a big move for the company and “highest-profile test yet” of a type of trading “technique” that allows companies to “list shares without raising money through traditional stock,” according to Bloomberg Technology.
With over 70 million subscribers, it looks like the world’s largest paid streaming service now no longer needs venture capital funding, but instead of a more traditional initial public offering (IPO), the company is pursuing a “direct listing” of its shares. Following this approach, Spotify would bypass initial fundraising while allowing existing investors and insiders to trade their shares on the open market. According to Lucas Shaw and Alex Barinka at Bloomberg, this “avoids underwriting fees and restrictions on stock sales by current owners, and doesn’t dilute the holdings of executives and investors.”
The move is the biggest of its kind following Pandora Media’s IPO in 2011, and would legitimize Spotify as a true power-player in today’s streaming market. In 2015, Spotify was valued at $8.5 billion when raising money from investors, but sources at Reuters and the New York Times believe it to now be worth as much as $19 billion based on private transactions. The company recently came under fire for a $1.6 billon copyright infringement with Wixen Music, one that would most likely continue into the first quarter of 2018 when the company’s direct listing appears to take place.
