When we think about listening to our favorite music, the first thing that comes to our mind is the music streaming service Spotify. Gone are the days when we needed to download our favorite songs manually and copy it to devices such as our phones and PCs in order to play our favorite playlist whenever and wherever we went. Now, we only need to connect to the internet, browse Spotify and enjoy listening to our favorite music. Spotify is our number 1 on-the-go music streaming service. And it seems that not only millions of customers around the world enjoy and love Spotify, but also future investors and businessmen. Why? It is because, for the first time, Spotify has filed for a whopping $1 Billion IPO for the public!

Spotify to File an Astounding $1 Billion IPO

Last Wednesday, businessmen, and investors all over the world were in shock when Spotify announced that it has filed for an IPO amounting $1 billion and it’s intending to officially enter the US Stock Market. It registered the company name as “SPOT” on the New York Stock Exchange just this week.

Spotify to Offer an Astounding 1 Billion Dollars IPO For The First Time

According to the filed document obtained by the SEC, the company’s overall shares amounts as high as $132.50 based on recent trade in the private market. This high pricing of the shares prompted the company to open its stock to the public market. Financial adviser, Morgan Stanley, commented about the big move as highly unusual because the company has yet to seek the underwriter’s advice on determining the initial price for stock share as well as its demand from the public. Stanley stated that before an IPO is filed to the SEC, most companies would normally seek guidance before offering their shares directly on the stock exchange. Even if what Spotify did was legal, Morgan expressed his concern that the trading volume and the price per share for SPOT may be volatile and unstable because of this action.

Spotify’s Net Profit and Asset for the Past Few Years

Spotify is one of the biggest European startup company that has entered the NY Stock Exchange and offered an IPO following Dropbox. According to the submitted document, the company was able to generate an astounding €4.1 Billion as its revenue last year. Their high revenue had increased more than 40% as compared to their €2.9 Billion revenue in 2016. And if you analyze its statistical long-term growth, its net profit and revenue gains have increased more than 100% from its initial €1.9 Billion revenue in 2009. Based on the revenue statistics, Spotify is confident that they will earn more revenue in the following years because of their solid audience. In fact, Spotify reported that it currently has 159 million monthly subscribers worldwide, so the monthly income revenue is steady. Furthermore, they claimed that their subscribers have doubled in comparison to Apple Music, its largest and closest competitor in the industry.

However, despite their progress, we couldn’t deny that Spotify has also experienced a significant loss in the past few years. Last year, there was a decline in its revenue amounting to $1.5 billion, which is around 130% of revenue decline compared to its profit in 2016.

Spotify Announced the IPO Move Right After Dropbox

Swedish CEO Daniel Ek is positive that the company will attract more international investors after the IPO Filing

Prior to Spotify’s official announcement, another giant tech company, Dropbox, announced its first IPO five days before. Before Spotify decided to open its doors to the public, it only attracted a few private market entities and investors like Chinese Tencent. Aside from that, it also invited billionaires Li-Ka Shing and Sean Parker, and TPG,  which is a private equity giant. Spotify was created and founded by Daniel Ek and Martin Lorentzon in Stockholm, and they are currently the CEO and Chairman respectively of the company.