BUSINESS NEWS: Spotify Files for Direct Listing of Up to $1 Billion
Music streaming service Spotify on Wednesday became the first major company to file for a direct listing of up to $1 billion with the U.S. Securities and Exchange Commission.
A direct listing is an unconventional way to pursue an IPO without raising new capital, helping the company eliminate the need for a Wall Street bank or broker to underwrite the public offer.
Launched in 2008, Sweden’s Spotify is the biggest global music streaming company and counts tech giants Apple and Amazon as its main rivals.
In its filing, the company said it has 71 million premium subscribers and about 159 million monthly average users. By comparison, Apple Music, which was launched in 2015, has 36 million paying subscribers.
Spotify’s premium subscription costs $9.99 a month. Apple Music too charges the same but offers a three-month free trial to its users. Unlike Spotify, Apple does not have an advertising-based free service.
“With our ad-supported service, we believe there is a large opportunity to grow users and gain market share from traditional terrestrial radio,” Spotify said.
The company is seeking to list its ordinary shares on the New York Stock Exchange under the ticker symbol “SPOT.” http://bit.ly/2F0OfCU
Revenue for Spotify, which is present in more than 60 countries, came in at 4.09 billion euros ($4.99 billion) in 2017, compared with 2.95 billion euros, a year earlier.
Its operating loss widened to 378 million euros from 349 million euros a year earlier.
Reporting by Nikhil Subba in Bengaluru; Editing by Maju Samuel and Arun Koyyur