But until now no big company had contemplated direct listing as an alternative.
Although there was an uptick in the number of IPOs in America in 2017-108, compared with 74 in 2016-the average number of IPOs has remained at around 100 annually since 2000, compared with over 300 in the course of the two previous decades. IPOs themselves have become rarer, as startups such as Uber and Airbnb have chosen to raise money through private markets instead. Instead of paying investment banks hefty fees to arrange an IPO, Spotify plans to have existing shares simply switch one day to being tradable on the New York Stock Exchange (NYSE). No wonder, then, that the decision by Spotify, a music-streaming service, to opt for an unconventional alternative called a “direct listing” has prompted debate. A recent job listing has hinted that Spotify might get into the hardware business by producing its own smart speakers.FOR seasoned bankers and starry-eyed entrepreneurs alike, doing an IPO, or initial public offering, is synonymous with the very idea of taking a firm public. We have also heard speculation that Spotify could be branching out beyond just music streaming. This helped by the fact that Apple Music comes (sort of) preloaded on every iOS device which does make it easier for users to sign up for it. However analysts have predicted that at the rate Apple Music is growing, it is possible that they could very well overtake Spotify in terms of subscriber count as soon as this summer.
What this means is that Spotify’s valuation, based on ordinary shares outstanding as of the 22nd of February, would be around $23 billion.Īccording to Spotify, they announced last month that they have hit the 70 million subscriber mark which puts them way ahead of the competition. The company will begin trading on the New York Stock Exchange under the ticker name “SPOT”, with shares being traded as high as $132.50 on private markets, according to the company. However it seems that it is only after about 3-4 years later that those rumors have finally come true because following a report of a confidential IPO filing, Spotify has finally announced that they will be going public. We have heard the rumors that Spotify could be planning on going public many years ago.
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