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Spotify Considers Going Public Without an IPO

Employees and venture capitalists would sell their shares to investors directly

   

Spotify may soon go public, the online music streaming site announced.

SpotifyHowever, the tech company may be doing things differently as it will not choose to go the traditional way by launching an initial public offering (IPO). The even is a fundraiser that helps the stock gain some traction early on, but Spotify may seek to bypass this.

As an alternative to such a move, the company’s employees and venture capitalists would sell shares to investors directly. The option of “direct listing” does have some benefits as it allows the company to avoid paying extra fees associated with an IPO, thus preventing diluting the share.

Spotify would also be able to avoid the “leave the money on the table” situation, in which institutional investors and other wealthy people would have access to the IPO and benefit greatly on the first day.

Some analysts are already criticizing the move as launching an IPO usually raises a considerable amount of funds. While the move may be risky, it appears as if Spotify will do things the old-fashioned way.

Earlier this year, the company said it would be adjusting its business model in order to ensure that it could launch an IPO properly, which would be delayed until sometime in 2018.

It is unclear what stock symbol Spotify would use.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/spotify-ipo-2/.

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