×
You will be redirected back to your article in seconds

Goldman Sachs Sells Off $75 Million in Spotify Shares (Report)

A Goldman Sachs hedge fund has sold more than $75 million in Spotify shares, while another part of the company has been helping the streaming service to prepare for its public listing, according to a report in Sky News.

The shares, sold by Goldman Sachs Investment Partners, represent “less than half” of its stake in the Swedish-based company, the report says, citing a source person close to the transactions. Reps for Spotify and Goldman Sachs did not immediately respond to Variety’s requests for comment.

The report notes that “The trades are likely to attract attention because of Goldman’s role in helping Spotify finance itself as a private company in recent years, and in preparing it to go public with a valuation of well over $10 billion.” Another source defended Goldman’s move, saying that it had “practical reasons to sell a small stake.”

Several sources place Spotify’s value at $13 billion.

Facing an uncertain outlook on a traditional IPO, last month reports emerged that Spotify is considering a direct listing, whereby the company would list its existing equity instead of selling new shares.

The service has been gradually removing roadblocks to such a listing, signing long-term licensing deals with Universal Music Group and Sony Music, leaving Warner as the only major without a renewed deal (the previous deal expired last year, but continues under its terms until a new one is struck). The company is expected to reach a deal with Warner in the coming weeks.

The company announced late last month that it had passed 60 million subscribers — up 10 million from March — and a total of 140 million total users in June.

However, its revenue and operating loss grew significantly in 2016, according to the company’s annual financial statement released in June. Spotify showed an operating loss of some 349 million Euros ($389 million) compared with a 236 million Euro loss the previous year.  Its gross profit was just $502 million. “This is explained by substantial investments that have been made during the year, mostly in product development, international expansion and a general increase in personnel,” directors Daniel Ek and Par Jorgen Parson wrote in the filing. The company also said it will pay record labels at least $2 billion in royalties over the next two years.

The company has also been dogged by lawsuits from publishers claiming underpayment of royalties, as well as accusations that it is playing a role in the creation and promotion of “fake artists,” who are paid a flat fee and no royalties, which some claim saves the company millions of dollars. Spotify has denied any participation in this practice.

 

 

 

Popular on Variety

More Music

  • Latin Recording Academy Names Manuel Abud

    Latin Recording Academy Names Manuel Abud COO

    As it celebrates its 20th anniversary, the Latin Recording Academy today announced several key changes to its leadership team. Former Azteca America president/CEO Manuel Abud has been named the organization’s chief operating officer, while 19-year Latin Grammy vet Luis Dousdebes takes on the new position of Chief Awards, Membership and Preservation Officer. Also, Aida Scorza, who has worked [...]

  • Sturgill Simpson Grammys perfromance

    Sturgill Simpson Announces Club Tour to Benefit Special Forces Foundation

    Grammy winning singer-songwriter Sturgill Simpson has announced plans for a special small-venue tour to benefit the Special Forces Foundation, kicking off at the Troubadour in West Hollywood, CA, on September 29.  The limited run of dates comes on the heels of the simultaneous release of his album and Netflix anime film of the same name, [...]

  • HalseyDKNY 30th birthday party, Arrivals, Spring

    Watch Halsey’s Stunning Performance of ‘Time After Time’ at the 2019 Emmy Awards

    As part of Sunday night’s In Memoriam tribute at the 2019 Emmy Awards ceremony, Halsey performed a version of Cyndi Lauper’s 1983 classic “Time After Time,” over a montage of television stars who died over the past year. Introduced by actress Regina King, the singer performed accompanied only by a pianist and honored Katherine Helmond, Tim Conway, Gloria Vanderbilt, [...]

  • Spin Lab

    Big Deal Inks Joint Venture With Ricky Reed’s Nice Life Company

    Independent music publisher Big Deal Music Group announced today that they have signed a joint venture deal with Nice Life Copyright Company, the music publishing company founded by Grammy-nominated producer/ writer/ artist Ricky Reed.  Under the terms of the agreement, Big Deal will administer songs for Nice Life, and the two companies will join forces [...]

  • Atmosphere71st Annual Primetime Emmy Awards, Show,

    Emmy Viewers Not 'Feelin' Good' About Bizarre Music Choices

    It was known ahead of time that the Emmy Awards planned to dispense with a traditional orchestra or pit band for the walk-up and bumper music. What wasn’t anticipated was that the music choices were being outsourced to a bar mitzvah DJ in Des Moines. Or, very possibly, it was a local who had found [...]

  • Born to Be Live: 'Easy Rider'

    Born to Be Live: 'Easy Rider' Gets a Concert/Screening Premiere at Radio City

    In a year full of major 50th anniversary commemorations — from Woodstock to the moon landing — why not one for “Easy Rider,” Dennis Hopper’s hippie-biker flick that was released on July 14, 1969? That was the idea when a rep for Peter Fonda, who starred in the film as the laid-back Captain America, reached out [...]

More From Our Brands

Access exclusive content