×
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.

 

 

 

More Music

  • James Marsden attends the 2019 MOCA

    New Abortion Ban Laws Take Center Stage at MOCA Gala

    Forty years ago in Los Angeles, the decision to invest millions in a museum dedicated exclusively to contemporary art — not to mention its formerly desolate downtown location, where the vibe was more apocalyptic than artsy — was a risky proposition. But now that the city’s cultural heart has shifted south of Hollywood, it seems [...]

  • Spectators watch the 2019 Eurovision Song

    U.S. Music Industry Delegation Convenes in Tel Aviv for Eurovision

    This past weekend, squeezed between a string of Eurovision Song Contest parties, Tel Aviv’s posh Norman hotel played host to an intimate, invite-only dinner of music industry delegates from the United States. The rooftop-set event was designed as a highlight on the itinerary of the Creative Community for Peace (CCFP) weeklong trip to Israel. CCFP, [...]

  • Greta Von Fleet - Jake KiszkaGreta

    Greta Van Fleet Put Spotlight on Solos at Asbury Park Tour Stop

    Michigan rockers Greta Van Fleet brought their “March of the Peaceful Army” tour to the Jersey Shore on Saturday night, performing at the legendary Asbury Park venue the Stone Pony’s Summer Stage. The band packed the outdoor venue on a moonlit, summer-seeming night in what staffers said was the series’ fastest-selling concert to date, with [...]

  • Madonna

    Madonna's Madame X Tour Adds New York, Chicago and L.A. Dates

    Madonna has added additional shows to her upcoming Madame X tour. Nine newly booked dates have been announced for New York, Chicago and Los Angeles. The Queen of Pop adds five additional New York concerts at the Howard Gilman Opera House, which will take place between Oct. 2 to 7; two extra shows will take [...]

  • Doug Davis and Jodie ShihadehVariety Power

    Jodie Shihadeh Named Partner at The Davis Firm

    Jodie Shihadeh has been named Partner at The Davis Firm, PLLC. She joined the firm in 2011 and rose from associate to Managing Attorney and now partner. She graduated from Boston College and received her law degree from Fordham University School of Law in 2011. While still in law school she interned in the Business [...]

  • ZZ Top, Caesars Entertainment Team on

    ZZ Top, Caesars Team for Jukebox Musical 'Sharp Dressed Man' (EXCLUSIVE)

    Rock and Roll Hall of Fame inductees ZZ Top and Caesars Entertainment are developing “Sharp Dressed Man,” a jukebox musical set to open next year in Las Vegas featuring the band’s greatest hits. Members Billy Gibbons, Dusty Hill and Frank Beard are all serving as executive producers. “Sharp Dressed Man” is described as an “outrageous, [...]

  • Dakota Johnson Tracee Ellis Ross

    Dakota Johnson, Tracee Ellis Ross Co-Starring in Comedy 'Covers'

    Dakota Johnson and Tracee Ellis Ross will co-star in “Covers,” a comedy set in the music scene in Hollywood. “Late Night” director Nisha Ganatra is helming from a screenplay by Flora Greeson. Focus Features is partnering with Working Title Films on the movie. Working Title’s Tim Bevan and Eric Fellner will produce with Alexandra Loewy [...]

More From Our Brands

Access exclusive content