Spotify filed paperwork to go public with the Security and Exchanges Commission on Wednesday. Spotify did not release when they will go public but the filing did state that Spotify’s shares will be traded under the ticker “SPOT”.
Information released in the filing also stated that Spotify had a user base almost double that of Apple Music, which is its closest competitor. Spotify has a base of 159 million monthly active users and 71 million premium subscribers.
The music-streaming company will be filing for a direct listing of its shares. This means that no new stock is released but instead existing investors and insiders can trade their shares on the market. Because they are not following a traditional IPO, no new money will be raised. Spotify has warned that the prices on the New York Stock Exchange could have “little or no relationship to the historical sales prices of our ordinary shares in private transactions. But, it could save the company millions in underwriting fees because they will not have to follow any set prices. The filing also stated that “the public price of our ordinary shares may be volatile, and could, upon listing on the NYSE, decline significantly and rapidly.”
Spotify has also released that only one of its shareholders have entered into a 180-day contractual lock-up agreement that is normal during an underwritten IPO. This means that they all could share their shares at any time, including immediately after Spotify goes public. This, in turn, could flood the market and cause the public price of its shares to be negatively impacted.
According to the prospectus, Spotify had nearly $5 billion in revenue last year, which is up 39% from the year before. However the company posted a loss of $1.5 billion. $1 billion of the losses came from a non-recurring expense due to convertible notes.
Spotify said it would list “as soon as practicable after this registration statement is declared effective.”