$potify $oars, Labels Make $$$
• Spotify made its long awaited stock market debut on Tuesday, with shares opening at $165.90, well above the “reference price” of $132 per share set by the New York Stock Exchange as a placeholder prior to the IPO. At that opening price, Spotify boasted a market valuation of $29.5 billion, topping previous estimates. After a very busy day, Spotify shares closed at $149.01 — still not a bad day’s work.
According to a story in Variety, “It was long an open secret that the three major labels — Sony, Universal and Warner Music — owned stakes in Spotify — 5.7% for Sony, and an estimated 4% for the other two. (SEC rules require disclosure of shareholders with 5% or more).”
The story goes on to say, “Sony Music Entertainment owns 10,164,560 of Spotify’s outstanding shares, or 5.7% of all outstanding shares. Thus, multiplied by yesterday’s closing Spotify price of $149.01 per share, Sony Music Entertainment’s stake is worth a cool $1.514 billion. Assuming that UMG and WMG’s ownership stakes are 4%, as sources say — (although one source close to the situation tells Varietythat Warner’s share is less than 4%) — those shares are now worth about $1 billion each as of Tuesday’s closing price.” The three majors have all pledged to share with their artists any profit generated by the sales of the company’s equity in Spotify.
