Tuesday in CE: Spotify $23B Stock Market Valuation Set to Disrupt CE Ecosystem
If you haven't been listening to the noise Spotify is making in the consumer electronics world, now is the time to pay attention. The world's largest streaming service is going public today, trading under the ticker name SPOT, with a reference price at $132. That pegs the company at a $23.5 billion valuation, a big jump from an $8.4 billion valuation back in 2015.
But the IPO, which will actually be a direct listing, is not about "raising capital" said CEO Daniel Ek in a public blog post, it's about playing in the major league. "... While tomorrow puts us on a bigger stage, it doesn’t change who we are, what we are about, or how we operate." Spotify is the biggest company to ever go public via direct listing, and the first on the NYSE.
As a company, Spotify has seen a net loss of nearly $1.5 billion, posting revenue closer to $5 billion in 2018, in part to music licenses, advanced payments to big labels, and royalties. However, the more money they spend, the bigger that margin grows. And although the 70 million paid subscribers are likely to be passed up by its closest competitor in Apple Music, thanks to Apple Music being pre-installed on iPhones, Spotify is still growing its user base by about 2% per year and hopes to end the year with nearly 100 million subscribers.