Spotify Files for Direct Listing on NYSE

Spotify has filed for a direct listing of shares on the NYSE. A popular music streaming service launched in 2008, Spotify now has 71 million premium subscribers and about 159 million monthly average users. That's nearly double the number of subscribers to Apple Music.

A direct listing is an unconventional way to pursue an IPO and means that Spotify will be able to list without raising new capital or hiring someone to underwrite the offering.

Unlike an initial public offering, the resale by the Registered Shareholders is not being underwritten by any investment bank. The Registered Shareholders may, or may not, elect to sell their ordinary shares covered by this prospectus, as and to the extent they may determine. Such sales, if any, will be made through brokerage transactions on the New York Stock Exchange (the “NYSE”) at prevailing market prices. See “Plan of Distribution.” If the Registered Shareholders choose to sell their ordinary shares, we will not receive any proceeds from the sale of ordinary shares by the Registered Shareholders.


Notably, Spotify has created beneficiary certificates that will allow its founders to maintain complete control of the company.

Each outstanding ordinary share entitles the holder thereof to one vote. In addition, we have issued ten beneficiary certificates per ordinary share held of record (excluding warrants, options, and RSUs, as applicable) to entities beneficially owned by our founders, Daniel Ek and Martin Lorentzon, for a total of 379,201,200 beneficiary certificates. Each beneficiary certificate entitles its holder to one vote. Our beneficiary certificates may be issued at a ratio of between one and 20 beneficiary certificates per ordinary share as determined by our board of directors or its delegate at the time of issuance. The beneficiary certificates carry no economic rights and are issued to provide the holders of such beneficiary certificates additional voting rights. The beneficiary certificates are non-transferable and shall automatically be canceled for no consideration in the case of sale or transfer of the ordinary share to which they are linked. See “Description of Share Capital and Articles of Association.”

Spotify also disclosed what shares have been trading at in private transactions but warns that this may have no relation to the opening public price of its shares. Additionally, the company indicates that its novel method of listing may result in significant volatility.

No public market for our ordinary shares currently exists. However, our ordinary shares have a history of trading in private transactions. Based on information available to us, the low and high sales price per ordinary share for such private transactions during the year ended December 31, 2017 was $37.50 and $125.00, respectively, and during the period from January 1, 2018 through February 22, 2018 was $90.00 and $132.50, respectively, in each case excluding the Tencent Transactions (as defined herein). For more information, see “Sale Price History of Ordinary Shares.” Our recent trading prices in private transactions may have little or no relation to the opening public price of our ordinary shares on the NYSE or the subsequent trading price of our ordinary shares on the NYSE. Further, the listing of our ordinary shares on the NYSE without underwriters is a novel method for commencing public trading in our ordinary shares, and consequently, the trading volume and price of our ordinary shares may be more volatile than if our ordinary shares were initially listed in connection with an underwritten initial public offering.


The opening price of Spotify's ordinary shares will be based on buy and sell orders collected by the NYSE from broker-dealers. The designated market maker will determine an opening price in consultation with a financial advisor.

Spotify posted revenue of 4.09 billion euros in 2017 with an operating loss of 378 million euros.

More details in the full filing linked below...

Read More [via Reuters]