Music streaming service Spotify AB has filed to list its shares on the New York Stock Exchange, the Wall Street Journal reports, citing a person familiar with the matter.
The “confidential” filing with the Securities and Exchange Commission is for a direct listing, not an initial public offering, since it is not seeking to raise money as it goes public, the newspaper said.
Based on a recent share swap between Spotify and Chinese internet giant Tencent Holdings Ltd., the company is valued at nearly US$20 billion, making it one of the biggest technology companies to list on a US exchange, the report said.
The company, headquartered in Stockholm, Sweden, has been aiming to start trading its shares in March or April, the Journal said, citing unnamed sources.
Late last year, it received approval from the SEC to proceed with a direct listing on the NYSE, although the securities watchdog is said to have had concerns that Spotify’s direct listing could encourage other companies with weaker financial standing to access the stock markets without providing sufficient protection to investors, the newspaper said.
However, many companies have not used the direct listing method, which involves transferring their shares to the stock exchange, because the shares could founder as there are no underwriters to support the price.
On the other hand, in direct listing, companies do not have to pay hefty fees to underwriters as what usually happens in an IPO. Investors can buy the shares once they start trading.
The company is facing lawsuits accusing it of copyright infringement.
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