In summary, Spotify started trading at $165.90 under the ticker name SPOT on the NYSE. The SEC approved this request in February, which is lucky for Spotify, as it had already confidentially filed documents with the SEC at the end of December. In June 2017, the New York Stock Exchange (NYSE) made a request to the Securities and Exchange Commission (SEC) to alter its listings standards so as to accept direct listings. The tech and investor communities had eagerly speculated on how, when, and where this unusual listing will take place.
Spotify sparked big speculation when reports first emerged last May that it planned to carry out a direct listing on the stock market, effectively bypassing the traditional IPO process.
Unlike Spotify, Apple Music faces no pressure to be profitable while having almost unlimited corporate cash to invest in its service. With Spotify continuing to lose money, it certainly could have used that cash as it faces rivals such as Apple Music, which has been growing rapidly since its launch in 2015. With the number of IPOs stagnating in recent years, the tech industry will be watching the performance of Spotify’s stock in the months ahead to see whether its move should be duplicated or avoided by other overvalued unicorns searching for some kind of exit. While a direct listing saved Spotify millions of dollars in banking fees, it also meant that the company itself did not raise what could have potentially been billions of dollars for its own use. But in choosing to make a direct listing rather than pursuing a more traditional initial public offering (IPO) of stock, Spotify took an enormous gamble. The stock sale represents a major milestone for a company that pioneered the shift away from sales of digital downloads toward subscription-based music streaming.
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