And it believes it has more than twice as many paying customers as its closest competitor, Apple Music according to SEC filings. You might be interested to know that Spotify, one of the largest music streaming services on planet Earth, is about to go public. However, as The Guardian points out, it's hard to value the music streaming firm because in its 12 years of existence, it's never turned a profit, despite the fact that it now has 157 million listeners, of which 71 million are paying subscribers.
Spotify's growth has been matched by increasing losses.
Global recorded music revenue fell by 40% from $23.8 billion in 1999 to $14.3 billion in 2014, when music file sharing service Napster almost collapsed the CD market.
Spotify going public comes at an interesting time.
The company filed to go public in February in a move that experts suggest could value them at $20bn-$25bn.
"It really is a bellwether for just how much the wider market values the music industry", said Mark Mulligan, managing director for the investment research firm MIDiA. "It has never been done for a company of this size". It will skip a traditional initial public offering and directly list its shares on the NYSE. "Everyone can make it and there are more people consuming it than ever before". "Big mutual funds will start buying the stock", he said. The record labels and artists need Spotify. Instead, company insiders and investors will be selling their existing stock.
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Unlike traditional IPOs, Spotify did not raise new capital.
"The feedback has been mostly positive from the institutional community-on not only the company, but also the direct listing process", says Bliss. The company has forgone bank underwriters to allocate shares to large investors, which helps set the initial pricing for shares. If it were a typical IPO, they'd have to wait for a share lockup period to end to sell their stock. Bill Gurley, an Uber investor, tweeted on Tuesday that the "establishment wants direct listing to fail so they throw shade".
Spotify Technology SA is an innovative digital music service offering music fans instant access to a world of music. "The last price they had reported as of mid-March was $132.50...[more recently] the stock has been changing hands about $5 higher than that", explained Farrell.
In a recent investor presentation, Ek said Spotify is doing this because of "our desire to become more transparent and more accessible". I'm told that this could anytime during the trading day on Tuesday. "It could be 1 million and then 100 million by Wednesday".
The Swedish company began trading at an opening price of $165.90 per share, almost 26 per cent above the reference price, before slipping back a little. In part, that is because there isn't any bank to act as a "stabilizing agent" and prop up the stock if it plunges.