Thursday 19 October 2017

Spotify assures investors that plans for IPO remain on track following co-founder's radio remarks

Kim McLaughlin

Spotify moved quickly to assure investors that plans to go public are still on track for the music streaming service after co-founder and board member Martin Lorentzon told Swedish radio that reports of an impending New York Stock Exchange listing were false.

Mr Lorentzon said the company did not “need any money” and that it is “not looking for more and any IPO isn’t on the agenda”. He said Spotify is still focusing on growth over profitability.

“Martin is our co-founder and a board member, but not a spokesman for the company,” Spotify said in an emailed statement Friday. A public listing "remains an option for us,” the company said, adding it has not confirmed any “definitive” plans.

Last month, Spotify said it had taken a step toward going public, hiring banks to help it list in New York. The Swedish streaming service contracted Morgan Stanley, Goldman Sachs and Allen & Co. to advise on the process, according to spokeswoman Alison Bonny.

Spotify is mulling whether to do a direct listing rather than a more traditional public offering, a person familiar with the plans has said, although a final decision hasn’t been made. Under this process, the company would not sell new shares to raise money. Instead it will just make existing shares available to trade, allowing current investors to cash out.

With 50 million paying subscribers, Spotify is the world’s largest music streaming service. Helmed by chief executive officer and co-founder Daniel Ek, the company has maintained its leadership even as larger technology companies including Apple, Amazon and Google have entered the market. The unprofitable company has raised more than $1.5bn since it was founded more than a decade ago.

Independent News Service

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