Spotify explained why it’s ditching the traditional IPO for a direct listing on the NYSE on April 3rd today during its Investor Day presentation.
Spotify described the rationale for using a direct listing to go public with five points:
- List Without Selling Shares – Spotify has plent of money with $1.3 billion in cash and securities, has no debt, and has positive free cash flow
- Liquidity – Investors and employees can sell on public market and sell at time of their choosing, while new investors can join in
- Equal Access – Bankers won’t get preferred access. Instead, the whole world will get access at the same time
- Transparency – Spotify wants to show the facts about its business to everyone, rather than giving more info to bankers
- Market-Driven Price Discovery – Rather than setting a specific price with bankers, Spotify will let the public decide what it’s worth
You can follow along with the presentation below:
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