April 3 Is D-Day For Spotify
• Spotify announced will begin selling its stock directly to the people on April 3 in what is sure to be a volatile and fascinating first day of trading for the music company. As Recode reports, Spotify disclosed the date on Thursday during it “Investor Day” event, a live-streamed, open-to-the-public version of the roadshow that typically predates an initial public offering. Spotify, though, is forgoing a traditional IPO — in which stock is sold in advance of the opening day to some institutional investors — and is instead executing a novel “direct listing” approach in which company shares are sold directly to mom-and-pop stock pickers.
According to Business Insider, CEO Daniel Ek said Spotify will also skip what he called the “the pomp or the circumstance of it all,” and won’t do any interviews or hold any parties around the time of its listing. However, the company did want the chance to make a case for the role it can play in the music industry, and how it can compete with rivals like Apple Music. Ek’s big pitch yesterday centered around the idea that Spotify is both good for consumers and for artists. He called Spotify “a market place of services for the industry,” adding, “If you’re an artist in search of an audience, you really want to be on Spotify.”
Ek described Spotify, which got most of its $5 billion in 2017 revenue from premium subscriptions and advertising revenue, as a “creator experience platform.” He highlighted the company’s data analytics tools, which that give artists insight into how users are listening to their music, and which songs they skip. “Why does this matter?” Ek said. “We all know information is power, and for many it helps bridge the gap between the struggling and the successful.”
Spotify has already acknowledged that trading could have some wild ups and downs during those first days as the market tries to reach a consensus on how much Spotify is worth. But lots of other highly valued startups are closely watching Spotify’ broader performance to see if a company can successfully list without the fees and heavy imprint of bankers.
