News Worms
News Worms

Spotify may bypass IPO and list directly on stock market

Spotify may bypass IPO and list directly on stock market

Spotify may also be aiming to create a more amiable relationship with the music industry due to their controversially low pay-out in royalty fees, which amount to around 0.001 cents per play (most famously causing Taylor Swift to pull her entire catalog).

However, sources have told the WSJ that Spotify is seriously considering an alternative way to become a publicly listed company rather than a conventional Initial Public Offering.

Until now, all Spotify users had access to the same music catalogue, whether they subscribed to the Premium tier or used its ad-supported free tier. Locking in a deal with at least one other major would make going public easier for the company.

Spotify reportedly has plans to go public before the end of the year, but not in the usual manner Wall Street would expect.

Instead, Spotify is considering a direct listing without raising any new capital.

Spotify has signed a multi-year licensing deal with UMG, but respected industry analyst Mark Mulligan sees the agreement as the tip of a much larger iceberg that puts the music streaming leader in the fast-lane in its platform genre. For a company like Spotify with a valuation between $8 billion and $10 billion, avoiding those costs could save Spotify as much as $100 million, he added.

After months of whining that exclusive music deals hurt fans, Spotify is partnering with the Universal Music Group to do, well, exactly that. Traditional IPOs tend to be a more involved process for companies and prices are set after deliberations and meetings with investors.

"Spotify must be very confident that they can raise enough interest from investors without investment banks to do that for them", said Josef Schuster, founder of IPOX Schuster, a Chicago IPO investment firm. Spotify is still negotiating with the remaining two of the "big three" music labels, Sony Music and Warner Music Group.


editors' picks

April 08, 2017
Mourinho says unbeaten run bodes well for the future
Man United defender Luke Shaw could join either Liverpool or Manchester City in the summer as both teams remain interested. "If you are rich, that doesn't mean that you don't keep motivation high, personal pride high, professionalism high".

April 08, 2017
Storms take aim at Alabama after killing 2 in Louisiana
A tornado watch covered part of the Gulf Coast on Monday , including New Orleans and Mobile, said CNN meteorologist Dave Hennen. Central Georgia is bracing for another round of severe weather Wednesday and this round is expected to be worse than Monday .

April 08, 2017
'Misconceptions' Due To My Saffron-Clad Look, Says CM Yogi Adityanath
Singh said it was a coincidence that the first cabinet took nine decisions on the occasion of Ram Navami, celebrated today. The Cabinet, chaired by the Chief Minister, is likely to take up several key issues including a loan waiver for farmers.

April 08, 2017
Spain: ETA should disband and clear unresolved crimes
It emerged in the late 1950s during the dictatorship of Gen Francisco Franco, which repressed Basque and other cultures in Spain. The communication is a finishing touch to a 43-year violent campaign that claimed 829 lives, mostly in Spain.

April 08, 2017
Spieth whistles past his 2016 graveyard at Augusta
Dustin Johnson said on Tuesday that being the hottest golfer on the planet heading into the U.S. Johnson uses his top ranking to channel extra energy into workouts.

April 08, 2017
Court: Civil Rights Act Protects Sexual Orientation
Court of Appeals ruled Tuesday , clearing the way for an IN instructor to sue a community college for not hiring her. In the interim, EEOC has taken the position that sexual orientation discrimination is prohibited under Title VII.

April 08, 2017
BMO Capital Markets on Barrick Gold Corp (USA) (ABX)
Now the P/E of Barrick Gold Corporation stands at 34.31. 2,851,460 shares of the company's stock traded hands. The stock has earnings growth of 27.40% yoy and showed a high EPS growth of 38.80% over the past five years.

April 08, 2017
Arsene Wenger says Alexis Sanchez wants to stay at Arsenal
But Wednesday's 3-0 win over West Ham ended with supporters staying behind to chant his name in a gesture of support for Wenger . As you know the players first have to see if they are happy at the club and most of the time it is down to finding an agreement.

April 08, 2017
No step too small in helping workers cope with depression
Yet, fewer than half of the people suffering from depression are receiving the treatment they need to live healthy lives. In many countries, there is no, or very little, support available for people with mental health disorders.

April 07, 2017
Beleaguered Nunes steps aside from House probe on Russia
House Speaker Paul Ryan said he supported Nunes' decision and said the congressman is eager to talk to the ethics panel. Schiff said the full committee now has access to the unmasking evidence that Nunes and he reviewed at the White House.