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Spotify Will Go Public On April 3

Music streaming giant Spotify will begin to trade on the New York Stock Exchange on April 3 and will trade under the ticker SPOT.

The company live streamed its investor day overnight where it discussed the big picture, why it is going public and its business model.

Barry McCarthy, CFO at Spotify spoke about the company’s long term operating goals which includes the company targeting a revenue growth of 25 to 35 per cent. Last year its revenue growth was 39 per cent reaching €4.1bn.

It did not turn a profit in 2017 losing €1.24bn higher than the 2016 result of €539m. Its aiming for gross margins of 30 per cent to 35 per cent, up from 22 per cent last year.

Spotify gave a warning in its registration document stating it may never generate sufficient revenue to be profitable. However, McCarthy says he does see Spotify becoming a “money-making business” and investors should expect it to continue investing in growth at the expense of operating profit.

Daniel Ek, CEO says the reason Spotify is skipping the usual price discovery process of an IPO is because going public has not been about the “pomp and circumstance” of it all.

Spotify will be giving its first yearly financial guidance on March 26.

Only last week the company announced it was filing for a direct IPO on the NYSE, which some commentators called ‘unusual’.

The public listing was in jeopardy as the company is facing a US$2bn lawsuit against Wixen Music Publishing who claims 10,784 of its songs were streamed/downloaded billions of times without being paid compensation.

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