Spotify files to go public on the New York Stock Exchange
, New York Times|
Updated: Mar 01, 2018, 09.36 AM IST
Spotify on Wednesday filed a prospectus for its listing on the New York Stock Exchange, an indication of the imminent arrival of one of the most anticipated technology stocks in years, and a sign of the maturation of the streaming market that has turned around the long-struggling music industry.
The filing states that Spotify’s shares will be traded under the ticker symbol SPOT, but gives no indication of timing. A spokesman for the company declined to comment.
Spotify filed its initial paperwork with the Securities and Exchange Commission in late December, and investors have been expecting a listing by the end of the first quarter.
Instead of a traditional initial public offering, Spotify will, as expected, pursue a direct listing of its shares, an unusual process in which no new stock is issued — and therefore no money is raised. However, existing investors and insiders can trade their shares on the open market. This method could save the company millions in underwriting fees, but as the prospectus notes, it also comes with risks because there is no traditional “road show” process to guide the pricing of shares.
The prospectus is the most detailed disclosure Spotify has given about its business, which has been growing rapidly as streaming music — led in large part by Spotify’s success — spreads in popularity around the world.
According to the company’s filing, it had nearly $5 billion in revenue last year, up 39 percent from the year before. By the end of 2017, Spotify had 159 million active users, including 71 million who pay for subscriptions; the rest, using the “freemium” model that has become Spotify’s marketing hallmark, get free access to music but are subjected to advertisements.
But as quickly as Spotify has grown, so have its losses. Last year, it had $1.5 billion net losses, up from about $660 million the year before.
The filing states that Spotify’s shares will be traded under the ticker symbol SPOT, but gives no indication of timing. A spokesman for the company declined to comment.
Spotify filed its initial paperwork with the Securities and Exchange Commission in late December, and investors have been expecting a listing by the end of the first quarter.
Instead of a traditional initial public offering, Spotify will, as expected, pursue a direct listing of its shares, an unusual process in which no new stock is issued — and therefore no money is raised. However, existing investors and insiders can trade their shares on the open market. This method could save the company millions in underwriting fees, but as the prospectus notes, it also comes with risks because there is no traditional “road show” process to guide the pricing of shares.
The prospectus is the most detailed disclosure Spotify has given about its business, which has been growing rapidly as streaming music — led in large part by Spotify’s success — spreads in popularity around the world.
According to the company’s filing, it had nearly $5 billion in revenue last year, up 39 percent from the year before. By the end of 2017, Spotify had 159 million active users, including 71 million who pay for subscriptions; the rest, using the “freemium” model that has become Spotify’s marketing hallmark, get free access to music but are subjected to advertisements.
But as quickly as Spotify has grown, so have its losses. Last year, it had $1.5 billion net losses, up from about $660 million the year before.
