Recently, the latest rage in the music world is that Spotify has confidentially filed “IPO” documents with the Securities and Exchange Commission. However, unlike a typical IPO where an investment bank underwrites and allocates shares to institutional investors, Spotify will allow existing investors to sell shares directly on the public markets. Direct listings, which are highly unusual, have often been done by small-cap companies. This is the first time that a company with a multibillion dollar valuation, in Spotify’s case $20 billion, will offer shares in this manner. The direct listing will provide liquidity for existing shareholders and will allow new investors to participate in a pure-play, on-demand music streaming service. While at first glance, this may appear to be a bizarre strategy, as we discussed in a recent Bloomberg interview, this is an incredibly exciting moment for the music industry.
Miles Davis always said, “Music is the space between the notes. It’s not the notes you play, it’s the notes you don’t play.”
Topics: Feed.fm Blog