Most startups follow a pretty standard route when they go public, raising funds by issuing new shares to institutional investors that then sell them to the public. But Spotify circumvented that process in April when it listed its existing shares directly on the New York Stock Exchange.
"Spotify has never been a normal kind of company," CEO Daniel Ek wrote in a blog post about the decision. Being abnormal worked for the Swedish music streamer: The stock debuted at a price just short of $166 per share and didn’t exhibit any of the volatility that some experts feared. The direct listing is "now a viable option," says Renaissance Capital IPO strategist Matt Kennedy, but he adds, "Just because Spotify pulled it off doesn’t mean any company can."
THR weighs in on why it worked.
