It’s been a whirlwind over the past few years as big tech unicorns continue to leave private waters to seek out that lucrative public money. According to Axios, the latest company to join those ranks is Spotify, which reportedly filed for an IPO sometime during the end of December.
Unfortunately, Axios says the filing was done confidentially, so there’s not a lot of details to talk about. Spotify reportedly still plans to conduct a direct listing instead of a more traditional float.
In a float, the company going public gets to create shares and sell them in bulk to banks, brokerages, and investment funds prior to the first day of trading. Meanwhile, a direct listing means that everyone will be fighting for shares on day one, and even an average investor will have the same opportunity to buy shares as larger institutions. Theoretically, this could mean less fees for Spotify and potentially higher revenue from selling shares in the long run, but it could also result in increased volatility and smaller short term returns.
Axios says the timing of Spotify’s filing indicates that the company plans to list its stock sometime in the first quarter of 2018, though it’s uncertain if that timetable has changed now that the company has been hit by a $2 billion copyright infringement lawsuit from Wixen Music Publishing.
In September, Fortune pegged Spotify as being worth between $20 and $26 billion, which even with poor IPO results would value Spotify as the biggest streaming music company in the world. Either way, Spotify better be careful, or else it could run into the same problem facing Snap, which has seen its share price fall by almost 40 per cent in less than a year after its IPO last March.
[Axios]