(CelebrityAccess) — Bloomberg is reporting that Spotify Ltd., owner of the popular music streaming service, is weighing the possibility of directly listing their shares on public exchanges without raising any addition funding.
According to the report by Bloomberg, a source who asked not to be identified said Spotify's management team doesn't feel the need to raise additional capital but is interested in allowing long-term investors and employees to cash out.
This strategy would mark a shift from the traditonal IPO, which lets companies with sufficient public profile to list on public exchanges while raising an infusion of capital at the same time by offering a block of stock to investors on the day before they go public.
Spotify's approach would eschew the block offering and the capital it raises, but let the company avoid some of the fees and would help to protect the company's stock from dilution. It would also help to protect against the negative consequences for a company’s brand after stumbling during a high profile IPO, such as befell Robert Sillerman's SFX.
As well, Spotify has reasons to be wary of an IPO — the company has yet to turn a profit and still has thus far only revealed licensing agreements with Universal, leaving the potentially at risk from the majors such as Sony Music and Warners, all of which may dampen investor enthusiasm for the stock. – Staff Writers