Spotify plans to utilize a direct listing instead of a traditional float, which explains why no banks are listed as underwriters (although Morgan Stanley is serving as financial advisor). If successful, it could change how well-known tech companies go public.
A direct listing only allows investors to buy shares on the open market, with no pre-determined price, unlike a traditional IPO, which lets underwriters set an initial price through hype. In other words, a direct listing will let casual investors jump in on Spotify stock right away, instead of first waiting for big investors to take their cut.
Spotify had close to $5 billion in revenue for 2017, up from $2.95 billion in 2016; the company remains unprofitable. The streaming music service will be listed on the New York Stock Exchange (NYSE) under the ticker symbol SPOT.
According to Spotify’s filing, Europe is their largest market with 37 percent of its total subscriber base. The service has 71 million premium subscribers and 159 million monthly active users.
Back in May of last year, it was reported by CNBC Spotify was set to go public in 2018, and that has now come to fruition.