The speculations surrounding Spotify’s public offering have been running wild for more than a year now. But, sources aware of the developments tell CNBC (and Reuters) that the inevitable may finally be happening towards the end of 2017 or early 2018. They suggest that music streaming giant, Spotify, is planning to make a debut on the New York Stock Exchange (NYSE) in time to gift investors the holiday surprise they’ve been waiting on.
Instead of going the traditional IPO way, Spotify is planning to go public through a direct listing, according to the report. This means the music streaming giant won’t be acting in a manner similar to Snap Inc, who just made its debut on NYSE last month. It is the process where the company’s shares are sold to the public and investors at a fixed price, decided on the basis of feedback for their offering. It follows a whole defined procedure, while the direct listing method is more of an open pot.
Instead, Spotify is neither going to define an exact IPO price for the company’s shares nor will it be touring the entire globe to attract investors to purchase their shares. Everyone interested in their offering will have to pick up company stock from the open market when Spotify is finally live on the stock exchange. They can buy and sell shares at per their own will, in real-time. Their bankers won’t have to spend time convincing investors about the streaming giant’s books.
The sources further suggest that Spotify has been bolstering its services and music streaming partnerships over the past year. The company has been trying to maintain its lead over other music streaming platforms, primarily Soundcloud and Apple Music. It has recently revealed earlier this year that it has achieved the massive 50 million subscriber milestone. It has also followed an aggressive M&A strategy over the past few months, where it acquired content recognition startup MightyTV, Shazam-like audio detection platform Sonalytics and other partnerships.
The IPO is potentially happening and Spotify is currently being valued at around $13 billion, according to sources aware of the matter. The music streaming giant has confirmed that it has signed up the services of Morgan Stanley, Goldman Sachs, and Allen & Co. to advise them for the direct listing. The spokesperson, however, decided to keep shut on the pricing and schedule.
The IPO market, after being stagnated for years, is finally starting to show signs of revival. The music streaming giant is going to follow behind the initial offering of Snap Inc., the tech giant behind renowned ephemeral chat app Snapchat, from earlier this year. We’ve since also seen several other technology giants, such as Cloudera, Okta, and Twilio, also make their way to the stock exchange. Most of them, especially Snap don’t seem to be performing quite well. It is trading dangerously close to its IPO price of $17.
