The world’s largest music streaming service, Spotify, is serious about its long-awaited IPO in New York. The Swedish company chooses unusual way of direct placement, as shown in published prospectus. Spotify saves usual commercial tour with investors and a subsequent price-finding process with participation of investment banks.
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Instead, purchase and sale offers on day of initial listing shall decide on starting price of shares. In case of direct placement, share certificates would simply be traded. This saves costs for company. However, this also accounted for usual method of approaching fair share price.
Spotify is number one in music streaming business where songs are played directly from net. At end of 2017, Spotify was reported to 71 million paying subscription customers.
Spotify was rated at 8.5 billion dollars in latest round of financing in summer of 2015, according to media reports. According to information from Wall Street Journal last spring, a stock market value of ten billion dollars was targeted for stock placement, according to analysts, it could be at 20 billion dollars.
