- Spotify filed the paperwork to list shares on the New York Stock Exchange.
- The company is planning to do a "Direct IPO" which bypasses the typical Wall Street process.
- Spotify is the largest music streaming service with 71 million paid suscribers, but rival Apple is catching up fast.
Spotify has filed paperwork for a direct public offering, a risky and unusual process to quickly list its shares as it races with Apple to become the de-facto standard in the fast growing music streaming business.
The 10-year-old Swedish company filed an F-1 prospectus with the SEC on Wednesday for the offering. Spotify, which is reportedly valued at $19 billion in the private markets, plans to list shares on the New York Stock Exchange under the ticker "SPOT."
Spotify pioneered the music streaming business, which has overtaken digital downloads, as well as the ravaged CD business, to become the largest segment of the music industry in the US.
With 71 million paid subscribers, Spotify is currently the world leader, but it is facing stiff competition from Apple, whose three-year old Apple Music service has already racked up 36 million subscribers. Google and Amazon are also pushing their own streaming music services.
That competition has forced Spotify to spend heavily on music licensing, to maintain a deep catalog of music boasting 35 million tracks , as well as on marketing and R&D. The spending has resulted in hefty and growing losses. In 2017, Spotify said it had a net loss of €1.2 billion ($1.5 billion USD), compared to a net loss of €539 million the year before.
The company's revenue increased 39% year-on-year in 2017, totaling roughly €4.1 billion, or $5 billion.
Warning: The stock could "decline significantly and rapidly"
Spotify is offering its shares directly to investors, bypassing the typical Wall Street process where banks are hired to find buyers for the shares. Its F-1 form pegged the IPO as a $1 billion offering, though that figure is likely a placeholder number that could change as the offering gets closer.
The direct IPO means that Spotify will sell shares without