Jan. 3 (UPI) -- Spotify, the Sweden-based music streaming service, quietly filed for placement on a public stock exchange, a source close to the development said on Wednesday.
Instead of an initial public offering, which involves underwriting fees, publicity and a dilution of currently-held stock, Spotify will ask for a direct listing, Bloomberg News reported on Wednesday. The procedure will allow current stockholders to begin trading their shares on a public exchange. While an IPO would bring in money to pay for newly-issued stock, Spotify currently has a steady cash flow from 60 million paying subscribers.
The company filed the required U.S. Securities and Exchange Commission forms in December, with a plan to go public in the first quarter of 2018, a person familiar with the matter told Bloomberg News. The New York Stock Exchange also sought approval from the SEC to change its policy and allow a direct listing.
Valued at about $15 billion, Spotify is believed to be the largest company to seek a direct listing. More importantly, it could prompt a change in the way Silicon Valley startup companies go public on stock exchanges, the technology website Axios reported on Wednesday.
Spotify, founded in 2006, pioneered the method of legal Internet streaming of recorded music. In 2017 it renegotiated deals with three major record companies. Information on the stock exchange listing came two days after Spotify was sued for $1.6 billion by the music publishing company Wixen.
Wixen's suit says that Spotify streamed thousands of songs, including those by Tom Petty, Stevie Nicks and The Doors, without a license. Spotify has not commented on either the lawsuit or reports of its stock plans.