According to Tom Buerkle in the New York Times, the $8.5 billion music-streaming service is considering listing its shares directly without raising any new capital, Mergermarket and The Wall Street Journal have reported. Going public is uncommon for a company like Spotify. The reason they may be going public is because they have been losing money of the last few years. However, they just struck a new licensing deal with Universal Music which would lower Spotify’s onerous revenue share if it can attract enough new customers. Paying subscribers have nearly doubled since 2015 to exceed 50 million. Which is good news for Spotify. But, large investors may be uneasy still. The terms of the convertible debt 11-year-old Spotify issued last year also put pressure on it to go public soon. According toy taking their shares to market without seeking new capital, Spotify would provide its backers an easier way to sell while avoiding some of the traditional rigmarole of an initial public offering, including banking fees that can be as much as 7% of funds raised.
Written by: Caitlin Brock