Spotify has filed for an initial public offering (IPO) on the New York Stock Exchange.
The streaming music service does not need money, they are cash positive and have an estimated value of $20 billion. They chose to do the non-traditional IPO for a direct listing, which allows shareholders to trade stocks in the company in a way that avoids underwriting fees and restrictions on stock sales, without diminishing the value of the holding.
That doesn’t mean they won’t make money from filing.
According to NerdWallet, trading Spotify may not be the safest choice. They say that while the Swedish company grew 52 percent last year, their losses more than doubled as well moving from $600 million versus $257 million.
No matter the risk, this move isn’t just about growth in the music industry, it is showing a change in how companies are using the stock market.
With 60 million paying subscribers, out of their 140 million overall subscribers, Spotify is twice as large as Apple Music, which comes in as number two for streaming music services. They are followed by Deezer, Pandora, Napster and Tidal.