Spotify Files for Public Offering

Music streaming company Spotify on Wednesday unveiled plans to go public, with an eye to trading on the New York Stock Exchange under the ticker name “SPOT.”

The Stockholm, Sweden-based streaming service officially completed an F-1 filing for a public offering with the Security and Exchanges Commission.

“Our mission is to unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by these creators,” Spotify said in the filing. 

In its public offering, Spotify will directly list its shares on the NYSE, and not have underwriters set an initial share price to help court investors, as is typical with most IPOs. The streaming service has instead recruited Morgan Stanley & Co. as a financial advisor to work with a designated market maker to set the opening public price of Spotify shares.

As a guide, Spotify’s F-1 filing said private transactions of its shares recently varied between $90 and $132.50 in value from Jan. 1 to Feb. 22 of this year.

The 11-year-old company, which is run by founder and CEO Daniel Ek, has around 159 million users and 71 million paying subscribers in 61 countries, according to the Spotify prospectus, which makes it larger than rival Apple Music. Europe is the company’s biggest market with 58 million users, accounting for 37 percent of its total user base, as of Dec. 31, 2017. That’s up 26 percent year-over-year.

“In our North America region, MAUs (monthly active users) increased by 23 percent from December 31, 2016 to December 31, 2017, and now account for 32 percent of our MAUs,” Spotify added, noting Latin America is also a growth market.

The music streamer pointed to revenue of $2.37 billion in 2015, $3.6 billion in 2016 and $4.99 billion in 2017. Spotify has raised over $2.7 billion and counts Goldman Sachs, TCV and Accel Partners as some of its investors. Reports peg its valuation at around $20 billion.

“Spotify is more than a music streaming service. We are in the discovery business. Every day, fans from around the world trust our brand to guide them to music and entertainment that they would never have discovered on their own. If discovery drives delight, and delight drives engagement, and engagement drives discovery, we believe Spotify wins and so do our users,” the company said in its prospectus. 

As it goes public, Spotify also faces a copyright lawsuit from Wixen Music Publishing, which administers song compositions by Tom Petty; Zach De La Rocha and Tom Morello of Rage Against the Machine; The Black Keys’ Dan Auerbach; Steely Dan’s Donald Fagen; Weezer’s Rivers Cuomo; David Cassidy; Neil Young; Sonic Youth’s Kim Gordon; Stevie Nicks; and many others.

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