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Swedish music-streaming giant Spotify has recently filed an application to begin a direct listing on the New York Stock Exchange, insiders say.
The popular music provider Spotify has opted for a direct listing, a method which allows companies to list shares without raising money through traditional stock offering and also allows private stakeholders to trade shares on a public platform. A direct listing would avoid fees being underwritten and prevent the weakening of investor holdings.
With an estimated value of $15 billion, Spotify is easily the largest company to ever attempt a direct listing on the New York Exchange, as the method is principally favored by small issuers and real estate investment trusts. In fact, the move is so unusual that Wall Street have had to seek permission from the Securities and Exchange Commission to temporarily change its rules of operation.
As the world’s largest paid music-streaming service, with over 60 million paying subscribers, Spotify is hardly in need of more funding and a direct listing will appeal to current investors who don’t want to see their stakes diluted. If the decision proves successful, it could pave the way for other large tech companies, such as Uber and Airbnb to follow in their footsteps.