Report: Spotify Makes End-Run Around IPO Process

RADIO ONLINE | Tuesday, August 22, 2017

Spotify is reportedly making an end-run around the IPO process and has met with U.S. regulators scrutinizing the music streaming service's plan to skip a traditional share sale and list directly on the New York Stock Exchange, reports Bloomberg. Spotify is targeting joining NYSE to list its shares later this year or early next year. With over 60 million paying subscribers and awareness among investors, the company isn't seeking to raise money or make itself known to stockholders, while avoiding underwriting fees and restrictions on stock sales by current owners.

It also introduces uncertainty, Bloomberg reports, since underwriters in a typical IPO set a price based on investor feedback. The news agency also points out that just a handful of companies have done direct listings over the past decade on the Nasdaq Stock Market. Spotify would be the biggest, and the first for the New York Stock Exchange.

As for its meeting with the SEC staff, it's possible regulators simply want a better understanding of how Spotify's listing will work. The agency declined to comment, but has been weighing a proposed rule change at the New York Stock Exchange that would allow the listing to go forward.

Spotify's equity was valued at $8.5 billion two years ago when it raised $526 million. The company would be one of the largest consumer technology providers to go public in recent years.