Spotify Taking Steps to List on the New York Stock Exchange

March 1, 2018
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Technology stocks are a big thing on the New York Stock Exchange (NYSE). Shares in technology (along with industry) have been some of the biggest performers so far in 2018, with many showing resilience in the face of recent volatility. Many of the most valuable publicly traded companies are in the tech industry, and recent news reveals that there will be one more joining the ranks. Spotify, the Swedish music streaming company, has announced plans to offer shares directly on the NYSE.

Spotify Shares Could Add Up to a Value of $23 Billion

Spotify is taking a different route to most companies that list on the stock exchange. It’s common for companies to make an initial public offering where share prices are underwritten. Spotify is instead choosing a direct listing, which will allow private shareholders to start selling right away.

This means that Spotify itself might not gain any significant capital in listing the company. Instead, they are showing good faith to their early investors, who stand to gain the most by selling their shares on the public market.

In private share transactions, investors have been selling in a range of $37.5 – $125 over the past year. In 2018, some transactions have been as high as $132 per share. This could put the total market capitalization as high as $23 billion when Spotify is listed on the stock exchange.

Listing Will Occur in 2018

The company has already filed with the Securities and Exchange Commission, but there is no date set for when shares will actually be available. Interested investors should watch this space for news about Spotify stock.

About the Company

The Company is an online music streaming service that offers free accounts supported by advertising, or paid subscriptions that unlock unlimited streaming and downloading. Unique in the market, it has agreements with the three major recording labels (Sony, Universal, Warner), and also helps unsigned artists to self-publish their music on the platform.

It differs from services like iTunes because the company is not in the business of offering hardware. Spotify has operated at a loss in recent years, but is gaining traction in the right places to increase revenue and achieve profitability. The company increased revenue by 40% in 2017, finishing with $4.87 billion from all sources. Losses for 2017 were $1.46 billion.

Spotify has more than 70 million paid subscription accounts, and over 100 million users total (including free accounts).

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