×
You will be redirected back to your article in seconds

Spotify Files to Go Public Via Unusual Direct Listing

The music service intends to trade under the "SPOT" symbol on the New York Stock Exchange.

Spotify officially filed for a public offering with the Security and Exchange Commission on Wednesday. The music service intends to trade under the “SPOT” symbol at the New York Stock Exchange (NYSE), and offer registered shareholders the opportunity to sell shares in the company.

The streaming giant isn’t using the traditional IPO process for its public offering, but instead a rarely-used process called a direct listing that comes without underwriters. This also means that the company won’t have a share opening price. Instead, it offered some guidance in its filing Wednesday based on private share sales, which have ranged between $90.00 and $132.50 per share this year.

Based on these metrics and the number of outstanding shares, Spotify could be worth as much as $23.44 billion. However, Spotify warned that private share sales disclosed Wednesday “may have little or no relation to the opening public price of our ordinary shares on the NYSE or the subsequent trading price of our ordinary shares on the NYSE.”

As part of its SEC filing, Spotify revealed Wednesday that it had 159 million monthly active users and 71 million paying premium subscribers at the end of December. The company generated close to $5 billion in revenue in 2017 (€4,090 million), compared to $3.6 billion in 2016. Operating losses for 2017 were $461.2 million, compared to around $425 million in 2016.

Spotify used much of its prospectus to highlight the positive impact it has had on the music industry overall. To that end, the company, which was founded in 2008, pointed out that by the end of 2017, it had paid more than $9.77 billion to rights holders. It also took credit for being a key part in reversing shrinking music industry revenues, which bottomed out in 2015, and continued to grow in 2016.

Other tidbits from Spotify’s SEC filing:

  • The company claims to have nearly twice as many paying subscribers as Apple Music.
  • Spotify’s users stream 25 hours of audio every month on average.
  • 31% of all listening on Spotify comes from playlists, including popular ones like Rapcaviar and personalized playlists like Discover Weekly. Two years ago, playlists accounted for less than 20% of all listening hours.
  • Premium subscribers stream more than three times as much music on average on Spotify as users on the ad-supported tier.
  • The company’s revenue per user for premium subscribers has been declining, from an average  of $8.62 in 2015 to an average of $6.39 in 2017. This is likely due to an increased focus on lower-priced student and family accounts.
  • Spotify users streamed 11.4 billion hours of content in 2017.
  • Spotify ended 2017 with 2,960 employees.
  • Spotify CEO Daniel Ek received total compensation of $1.53 million for 2017, which included a $1 million bonus for hitting certain benchmarks. Ek currently owns 23.8% of all outstanding Spotify shares.
  • Sony is the only label that still owns more than 5% of Spotify’s outstanding shares — 5.7%, to be exact.

Wednesday’s filing still missed a few key details, including the date of the public offering. The filing also mentioned that shareholders would be able to sell shares worth of up to $1 billion. Companies typically file their initial IPO registration with a placeholder number that offers a ballpark of the number of shares they end up selling.

However, since Spotify is filing for a direct listing, it isn’t actually selling any shares of its own, and is instead simply offering existing shareholders the opportunity to sell any or all of their shares — making that placeholder number all but meaningless.

Companies typically reveal further details about their public offering in amended filings closer to the date of their offering, so we should be able to learn more about Spotify’s plans for the NYSE in the coming days or weeks.

Correction: 2:25pm: A previous version of this post stated that Spotify had used $1 billion as a placeholder for the maximum number of shares to be traded, and that the company would provide additional details about the number of shares to be traded closer to the date of the offering. However, since this is a direct listing without a lock-in period for existing shares, shareholders could theoretically trade all of their shares on day one — or none at all.

 

More Digital

  • Ed Sheeran Shape of You

    Ed Sheeran, Clean Bandit Top Shazam’s 2018 Year-End Lists

    Clean Bandit and Demi Lovato’s song “Solo” was the most-Shazamed song and Ed Sheeran’s “Perfect” was the longest running No. 1 track on the service’s global charts, the company revealed today in its year-end lists. Nicky Jam and J Balvin’s “X” was the No. 2 most-Shazamed song and Calvin Harris & Dua Lipa’s “One Kiss” [...]

  • Remote for Android TV-Based TiVo Device

    TiVo FCC Filing Suggests Android TV Device Coming in Time for CES

    A filing for a new TiVo remote control suggests that the company may be getting ready to show an Android TV-based set-top box at CES in Las Vegas next month. The device likely won’t be sold to end users, but instead ship to TV operators looking to combine TiVo’s DVR capabilities with Google’s TV platform. [...]

  • Telemundo to Launch English-Language Newscast With

    Telemundo to Launch First English-Language Newscast on YouTube (EXCLUSIVE)

    NBCUniversal’s Hispanic broadcaster Telemundo is developing its first English-language newscast in collaboration with YouTube in a bid to tap the burgeoning U.S. Hispanic youth demographic. Borne out of a YouTube grant aimed at awarding journalism projects that “elevate quality journalism, evolve business models to drive sustainable growth, and empower news organizations through technological innovation,” Telemundo News’ [...]

  • Wall Street Journal Site Hacked With

    Wall Street Journal Site Hacked With Pro-PewDiePie Message

    PewDiePie’s ongoing battle to keep his channel’s YouTube subscriber count No. 1 ahead of India’s T-Series took another bizarre twist: A branded-content section of the Wall Street Journal’s website was hacked with a fake message apologizing to PewDiePie and urging people to subscribe to his channel. A spokeswoman for Dow Jones & Co., publisher of the [...]

  • YouTube - Comcast Xfinity X1

    YouTube 4K Content Goes Live on Comcast's Xfinity X1 Set-Tops

    Comcast television subscribers can now enjoy YouTube in ultra-high definition: The Google-owned video service is now serving up 4K videos on Comcast’s Xfinity X1 set-top boxes, the cable company announced Monday. X1 owners who also happen to have a X1 voice remote can get access to a curated selection of 4K content by asking the [...]

  • Google - 315 Hudson Street

    Google Plans to Spend Over $1 Billion on New York City Campus

    Google has set plans to dramatically boost its footprint in New York City: The internet giant said it will invest more than $1 billion to establish a new 1.7-million-square-foot campus, Google Hudson Square, in Manhattan. The move is a major part of Google’s expansion plans in the city that will let it more than double [...]

More From Our Brands

Access exclusive content