Spotify Makes Confidential Filing For IPO

Music streaming service Spotify has filed confidentially with U.S. regulators for an initial public offering and is targeting a direct listing in the first half of 2018 that would allow some longtime investors to cash out, a source familiar with the matter said on Wednesday, reports Reuters.

If Spotify, which was valued at as much as $19 billion last year, goes ahead with its plans, it would be the first major company to carry out a direct listing, an unconventional way to pursue an IPO without raising new capital.

A direct listing mainly eliminates the need for a Wall Street bank or broker to underwrite an IPO along with many associated fees and could change the way companies approach selling shares to the public.

The U.S. Securities and Exchange Commission now allows all companies, regardless of revenue, to file a draft IPO registration statement confidentially before they unveil their financials.

Spotify is the biggest global music streaming company and counts Apple Inc and Amazon.com Inc as its main rivals.

Spotify was sued by Wixen Music Publishing Inc last week for allegedly using thousands of songs without a license and compensation to the music publisher. Wixen is seeking damages worth at least $1.6 billion.

Spotify intends to proceed with a U.S. direct listing in the first half of 2018 despite the lawsuit, according to a source familiar with the matter.