(Reuters) — Music streaming service Spotify has filed confidentially with U.S. regulators for an preliminary public providing and is concentrating on a direct itemizing within the first half of 2018 that may permit some longtime traders to money out, a supply accustomed to the matter stated on Wednesday.
If Spotify, which was valued at as a lot as $19 billion final yr, goes forward with its plans, it might be the primary main firm to hold out a direct itemizing, an unconventional approach to pursue an IPO with out elevating new capital.
A direct itemizing primarily eliminates the necessity for a Wall Street financial institution or dealer to underwrite an IPO together with many related charges and will change the way in which firms method promoting shares to the general public.
The confidential submitting was initially reported by information outlet Axios.
The U.S. Securities and Exchange Commission expanded the Jumpstart Our Business Startups (JOBS) Act final yr by permitting all firms, no matter income, to file a draft IPO registration assertion confidentially earlier than they unveil financials publicly.
Spotify is the most important international music streaming firm and counts Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) as its primary rivals. Reuters has beforehand reported Spotify was aiming to file for an IPO in late 2017 and record with the New York Stock Exchange early this yr.
A Spotify spokeswoman declined to remark.
Spotify was sued by Wixen Music Publishing Inc final week for allegedly utilizing 1000’s of songs, together with these of Tom Petty, Neil Young and The Doors, with no license and compensation to the music writer. It was unclear how the lawsuit would influence the IPO plans.
Wixen, an unique licensee of songs together with “Free Fallin’” by Tom Petty, “Light My Fire” by the Doors, “(Girl We Got a) Good Thing” by Weezer and works of singers reminiscent of Stevie Nicks, is searching for damages price not less than $1.6 billion together with injunctive aid.
Spotify intends to proceed with a U.S. direct itemizing within the first half of 2018 regardless of the lawsuit, in response to a supply accustomed to the matter. It has filed confidentially with the SEC with Goldman Sachs, Morgan Stanley and Allen & Co serving to organize it, the supply added.
The firm stated in June it had greater than 140 million energetic customers whereas itemizing greater than 30 million songs, however it’s paid subscribers that depend most in enterprise phrases. Spotify final reported greater than 60 million paid customers, twice that of Apple Music, its closest rival.
This article sources info from VentureBeat