Spotify Becomes Publicly Traded Company with Multi-Billion Dollar IPO

April 03 23:00 2018

Instead of raising new money, the shares held by existing Spotify investors will simply be made available for trading on the stock market.

This post will be updated when Spotify begins trading.

Looking at the the guidance for growing sales this year, Wilson wondered if Spotify can convince investors that it is able to turn a profit.

First, the plain maths: If Telia’s 1.4% stake still applied during its sale, then a $272m price would mean that Spotify’s total current market worth is $19.43bn.

If successful, Spotify could become a roadmap for the array of multi-billion dollar tech companies, investors are now hoping will go public soon, including Airbnb, Lyft and Uber.

Spotify is expected to reach 170 million listeners this year, up from the current 157 million, with paying subscribers slated to increase from 72 million to 90 million.

But Spotify is based in Stockholm, Sweden, not Switzerland. “Spotify has been a fantastic investment for Telia Company, both from a direct return and a partnership perspective”, says Johan Dennelind, President and CEO of Telia Company.

However, he did speak at length about the company’s challenges from Taylor Swift, who removed her music from Spotify and other streaming services in 2014 over what she felt were unfair royalty rates – a decision she reversed a year ago.

This is in addition to a weird model that Spotify will be using for their IPO.

“[Daniel] Ek, 35, started Spotify in 2006 because he thought he could stamp out the piracy that had ravaged the music business”.

Under the latter, existing shareholders and “insiders”, such as executives, are usually subject to a lock-in period during which they are restricted from selling shares, typically for 180 days. What makes Spotify, also subscription-based, different?

Netflix has also set itself apart from its rivals in video streaming by spending billions on original programming such as “Stranger Things”, and “The Crown”.

But it is also a strategy that has analysts uncertain of the company’s prospects, as it heightens the risk of a chaotic and unpredictable market debut.

In the decade since Spotify launched, it has faced a series of so-called “Spotify killers” from the likes of Apple, Google and Amazon.

Spotify, the world’s largest music streaming site, went public on the New York Stock Exchange Tuesday morning.

Normally with an Initial Public Offering (IPO), companies coming to market hire investment banks to advise on the process, organize a roadshow with would-be investors and help market the shares. That number will come down if Ek and Lorentzon sell a big chunk of their Spotify shares through Tuesday’s direct listing.

Normally, companies ring bells. In a release today, he wrote that “our focus isn’t on the initial splash”.

Spotify — Tomorrow

Spotify Becomes Publicly Traded Company with Multi-Billion Dollar IPO
 
 
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