News of Spotify’s imminent listing on the NYSE had kept all tech focused traders on alert as the streaming giant opted for an unorthodox method of going public. Spotify chose not to go the IPO route and instead chose a direct listing, which meant that existing shareholders (founders, VCs and employees) would be putting up their stock onto the market. A risky move, but it seems Spotify managed to do it pretty smoothly.
With an official debut price of $166 per share, Spotify’s market cap stood at a whopping $29.6 billion. Comparing to its $5 billion valuation just 3 years ago, I say it’s a pretty good figure. According to documents filed with the US SEC, Spotify had registered to make available an 55,731,480 ordinary shares on the NYSE, in addition to the 106m shares already made available by the company.
Founders Daniel Ek and Martin Lorentzon, who owned a combined 67% of the firm before trading put up a certain share of their stock for trading too. Other large investors include Universal, Warner, Sony Music and a few others that acted as VCs for Spotify in the past have not seemed to put up their stock for sale just yet. The three major labels seem to own roughly 15% of the company.
Daniel Ek had the following to say before the listing:
“Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years. So while tomorrow puts us on a bigger stage, it doesn’t change who we are, what we are about, or how we operate.
As I mentioned during our Investor Day, our focus isn’t on the initial splash. Instead, we will be working on trying to build, plan, and imagine for the long term.
Sometimes we succeed, sometimes we stumble. The constant is that we believe we are still early in our journey and we have room to learn and grow.
I have no doubt that there will be ups and downs as we continue to innovate and establish new capabilities. Nothing ever happens in a straight line — the past ten years have certainly taught me that. My job is to ensure that we keep our foot on the pedal during the ups, so that we don’t become complacent, and that we continue to stay the course with a firm grip on the wheel during the downs.
We have a lot to do — we are only in the second inning — and I’m more excited than ever for the future.”
Though Spotify’s valuation did fall 10.2% down to $149 per share by the end of trading, that still values the company at $26.5 billion. A number that would still be considered good, given the risks the company was taking on with the direct listing. With a number of expansion projects in the pipeline, one thing is certain – Spotify does need to be careful in terms of keeping its investors happy. It is after all, a public company now.
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