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Spotify Heading to the New York Stock Exchange 

The New York Stock Exchange has added another business to its’ exclusive list of publicly-traded companies.

Spotify, a digital music streaming service that was launched in 2008, will be listed on the NYSE stock exchange and available for the public to invest in the company via shares. This is expected to happen on Tuesday, April 3rd.

Spotify was recently valued at $20.6 billion, allowing the company to meet the minimum listing requirements for eligibility on the NYSE. The New York Stock Exchange requires newly listed companies to have 1.1 million publicly held shares that are held by at least 2,200 shareholders.

How will Spotify enter the markets? The company decided to proceed with a DPO (Direct Public Listing) instead of a traditional IPO (Initial Public Offering). This choice to bypass the high-cost method of listing as a IPO will save the company time and money, but won’t come with some of the added security blankets an IPO offers.

Spotify has a loyal subscriber base of 71 million users, ranking the company in the top 2 spots for music streaming services. It’s standing on the charts right next to Google Music, a service publicly launched by Google in 2011. No subscriber metrics available for Google Music.

Based on research from Wealthy Women Daily, here is a quick analysis of the deal:

  • DPO vs. IPO: The decision to proceed with a DPO is a smart move because Spotify already has a loyal customer base, making an IPO not extremely beneficial.
  • Increase in Capital: The money the company receives from the selling of shares will help with their lack of revenue. The DPO won’t create any new shares; the company will just sell their existing shares. Employees also have the option of selling their shares.
  • Trading on NYSE: When shares begin trading in April, the price will be volatile. You may see unpredictable price movements until a price range stabilizes in 3- 6 months.
  • Impact of Brand Positioning: Based on Spotify’s brand name reputation, retail investors will buy in at a safe point.

We will continue to watch this stock over the next few trading months.

Do you have questions about the markets? Leave a comment below or send a message with your questions.


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