Spotify Share IPO To Send Market Value To $25BN

Last month, Swedish music and video streaming service company Spotify announced its plans to officially start listing its shares publicly this April. The company which will be listing its shares on the New York Stock Exchange is set to become a company worth as much as $25 billion after its initial public offering launch. The Sweden-based company is reported to be currently valued at around $8.4 billion.

Spotify’s IPO which is one of the biggest tech IPOs seen in years following Snap Inc last year and Dropbox this year has initially receive an upbeat outlook from analysts until tech stocks on Wall Street suffered a setback when Facebook lost almost $90 billion from its total market capitalization following a data scandal. Last month, Facebook admitted that it allowed a research firm to harvesting of the data of more than 2 billion of its users. Tech shares also slipped following the massive decline in Facebook shares.

Others have also pointed out that the company have failed to post earnings over the past years that will bring investors upbeat profits or any profitability during the first couple stages of the IPO at an indefinite period of time. The company’s paying users are only recorded to be half of the more than 159 million people who use the application or service every month.

Different IPO Path

Along with the announcement to officially launch its IPO, Spotify is also set to follow a different path for its initial public offering. The company, which is set to launch on Tuesday will not be following the usual traditional route as it will not be raising capital during the launch. Instead, the company would be allowing its shareholders and employees who have been able to buy its shares for the past couple of years to sell it publicly.

This process would cut the usual IPO costs for the company which includes fees needed to be paid out to underwriters or banks. Spotify will not be issuing new stocks during the IPO offering as it does not intend to raise a large capital. According to Spotify’s chief executive officer Daniel Ek, a traditional model would not be beneficial to the company due to their lack of belief for the possible results of an IPO.

“Spotify has never been a normal kind of company.” stated Ek who added that the company’s focus will be working on building, planning, and imagining for the long term. In a blog post regarding the IPO of Spotify, Ek also added that despite the IPO placing the company in a bigger state, it will not change who they are, what they are about and how the company operates.

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