NEW YORK (CelebrityAccess) — As Spotify prepared for its public debut, there was significant speculation in the industry about what major record labels would do with their equity stake in the streaming music company after it started trading.
On Wednesday, Sony Music offered some clarity when they disclosed that it owned a 5.7% stake in Spotify and that it had sold 17.2% of their shares for more than $250 million.
The transaction was made on Tuesday before Spotify officially began trading on the exchange. Spotify closed its first day of trading with a market valuation of $26.5 billion.
While Sony did not offer additional details of the transaction, including the actual sale price for the stock, if the trade closed at Spotify’s opening price, it would have been worth almost 300 million, or approximately 30% of Sony Music Entertainment’s entire recorded music revenue from 2017.
On Wednesday, Sony also revealed that it would book a profit of 105 billion yen (about $986 million) for its fiscal first quarter, which it attributed to both its sale of the Spotify stock and the value of its remaining stake.
Sony has not provided any concrete guidance on what they plan to do with their Spotify windfall or how much of it they plan to reward their artists and other stakeholders, but the financial filing did include the statement:
“If a sale of SME’s Spotify shares results in the recording of a gain, SME will share that gain with its artists and distributed labels. Unrealized valuation gain (net) and the realized gain on the sale of shares (net) are calculated by deducting the estimated amount to be shared or the amount actually shared with such artists and distributed labels.”
A rep for Sony did not respond to a request for comment.