Music streamer Spotify files for an IPO; company could be valued as high as $23 billion

Music streamer Spotify files for an IPO; company could be valued as high as $23 billion
With 71 million paid subscribers, and 88 million listening to an ad-supported free tier of service, Spotify is the world's largest streamer of music. Spotify might not hold that position forever, which is why the company has decided that now is the time to file for an IPO (Initial Public Offering). In second place is Apple Music, which has garnered a total of 36 million paid subscribers and is projected to surpass Spotify in the U.S. by this summer. Apple does not have a free ad supported tier of service although it does offer a free three-month trial.

One of the bad things about going public, as far as Spotify is concerned, is that it requires a company to be more transparent with its financial data. Along with the filing came the news that Spotify lost approximately $1.5 billion last year on nearly $5 billion of revenue. The top line is growing as that figure was up 38.6% from the $3.6 billion grossed in 2016 and $2.37 billion in revenue that Spotify realized in 2015. The company says that the number of paid subscribers was up 46% in 2017 on a year-over-year basis. The number of monthly active users rose 29% from 2016 to 2017.

Spotify will use a direct listing which will allow its shares to be listed on a exchange faster than usual. The ticker symbol will be SPOT. Based on trading of Spotify's shares on private markets, the company could have a valuation of $23 billion despite the fact that it has not yet turned a profit since its launch in 2006. As soon as its filing becomes effective, Spotify plans on completing the IPO.

source: CNBC



1. CreeDiddy

Posts: 2273; Member since: Nov 04, 2011

Apple Music might be destined to add 70+ million paid subscribers by the end of this year. That would be crazy...That would spell trouble for Spotify...

3. ijuanp03

Posts: 648; Member since: Dec 30, 2014

nahh.. Spotify knows music streaming business more than anyone. Apple music has been around for 2+ years and still having a hard to taking the crown. I can feel their frustrations already with this IPO. lol

6. Martin_Cooper

Posts: 1774; Member since: Jul 30, 2013

Spotify is not a google or apple company, they are the best at what they do and offer the best service. They have the whole of Android user base to lure in the next decade. Thats a user base 8 times larger than Apple's. Not to mention they are luring in Apple users too. I am confident most of Android users wouldn't go for Apple Music.

2. ijuanp03

Posts: 648; Member since: Dec 30, 2014

I used Apple music for a month and returned to Spotify Premium because of richer content and their awesome playlists. Discovery Weekly is my favorite feature as I get to listen to songs based on my listening preference. I will never go back to Apple music. What spells trouble is Google Play overtaking Apple Music.

4. qnetic

Posts: 1; Member since: Mar 01, 2018

hopefully they'll make profit this year...

5. duckofdeath unregistered

That's an irrelevant concern in the case of Spotify. The reason they're not making a profit is their business strategy. They're in growth and therefore spending their monies on that. Amazon were "losing" massive amount of money for more than a decade, because they knew what they were aiming for. Today Amazon's founder is richer than Bill Gates. I'm obviously not saying Spotify will be as big as Amazon, just that they're doing what a growing business has to do to succeed.

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