Tech Bytes: Why Spotify could be the 'Netflix of music' one day
Spotify Ltd. will begin trading on the New York Stock Exchange on April 3, just a week after the company plans to provide its most recent annual financial guidance.
The music-streaming company announced the timing at an investor day Thursday, in a live-streamed hours-long event designed to introduce the company to public market investors. Spotify will skip the roadshow meetings and media interviews that are typical in a traditional initial public offering.
The company will give its first annual financial guidance on March 26.
Chief Executive Officer Daniel Ek said Spotify had chosen this route because “going public has not been about the pomp and circumstance of it all.”
Ek also doesn’t want to impose the post-IPO lockup period on existing investors, where they aren’t allowed to sell shares for a number of months after the shares start trading.
The company is skipping the usual price discovery process of an IPO. Spotify and its advisers won’t be setting a range for the company’s shares before they start trading. Instead, its first public market valuation will be set just before the stock lists, based on the number of shares that existing investors want to sell, demand from those willing to buy and the price that the parties agree on.
As of March 9, Spotify had 183.6 million ordinary shares outstanding, according to a filing.
While Spotify has tried to guide investors in its listing prospectus by disclosing the value at which shares have changed hands in private transactions, the range is wide. In 2017, the valuation ranged from US$6.3 billion to US$20.9 billion for the 12.8 million shares that changed hands, based on the stock price and shares outstanding listed in the filing. So far this year, the valuation has been calculated at US$15.9 billion to US$23.4 billion for the 2.8 million shares that traded.