Talk for Article "Spotify debuts on the NYSE"

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  1. [ This comment is from a user you have muted ] (show)

    I’ve removed reference to “secondary” market. It’s not correct. I think we have it right about now.

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      DU
      Deleted User

      No problem and certainly not worth wrangling over. In the business, however, (with reference only to the equities and debt markets not the money markets, currencies, derivatives, or commodities markets) a primary market is new issuance for corporate benefit. The float is traded on the secondary market. There is no status inference and these are terms of art. But I agree, for these purposes the terms are too narrowly defined, and a reader might infer some status implication. The reference should not have been included.

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    DU
    Deleted User

    Spotify to create a secondary market for its stock on the NYSE

    The music streaming service launched in 2008 and is active in 61 countries

    Spotify, the world’s largest music streaming service, has applied for listing on the New York Stock Exchange.

    [contribute-c2a text="You can edit or expand this story" buttons="edit"]

    Spotify said it will list its shares directly on the NYSE, bypassing the more traditional stock offering process through investment banks who typically underwrite initial price risk. “Spotify isn’t issuing new shares as part of the listing, and as such will receive no proceeds or raise any capital for the company itself,” Motley Fool columnist Evan Niu wrote. They are establishing a secondary market for their shares which will give them an ongoing and transparent valuation of their company.

    The Swedish company said prices for shares could value the business at $23bn. Last year, Spotify reported a net loss of $1.5bn – the company’s largest expense is the cost of licenses paid to record companies and publishers. The service first launched in 2008 and is active in 61 countries with 159m monthly active users and 71m paid subscribers. The company’s stock symbol will be SPOT.

    Spotify said that while not issuing new shares or using underwriters for an initial public offering, it is being advised by Goldman Sachs, Morgan Stanley and Allen & Co. Spotify acknowledges that this approach means there is a lower level of public disclosure. Spotify has filed a limited number of registration statements with the SEC. Spotify SEC registration filings

    1. [ This comment is from a user you have muted ] (show)
      DU
      Deleted User

      I’m offering this as a rewrite.

      1. [ This comment is from a user you have muted ] (show)

        Thanks. Think the story reflects your suggestions now.

        1. [ This comment is from a user you have muted ] (show)
          DU
          Deleted User

          Looks great. Sorry about the twenty-five+ suggestions. I’ve got to start doing this stuff offline so I’m not jamming the server.

  3. [ This comment is from a user you have muted ] (show)

    I have updated the story to reflect Spotify’s bankers and the risks in it not being an IPO.

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    DU
    Deleted User

    I’m not sure of the title’s meaning since a business model is tested in the marketplace itself. I think I understand the intent to suggest a nexus between the business model and share pricing. I’ll try to offer some ideas.

  5. [ This comment is from a user you have muted ] (show)
    DU
    Deleted User

    Hi Burhan and Shirley,

    I’ve offered wording which reflects your comments.

  6. [ This comment is from a user you have muted ] (show)

    “It’s a risky proposition for investors, who often rely on investment bankers for some professional guidance on valuation. “In connection with the process described above, unlike in an underwritten initial public offering, a [designated market maker] in a direct listing may have less information available to it to determine the opening public price of our ordinary shares than a [designated market maker] would in an underwritten initial public offering,” Spotify warns.”*

    * https://www.fool.com/investing/2018/02/28/its-official-spotify-files-for-direct-listing.aspx

    1. [ This comment is from a user you have muted ] (show)

      Hi Shirley, I think you make a very good point – the price of the shares in private transactions has wildly varied over the last year. According to the BBC:

      Spotify said its shares sold for between $37.50 and $125 each in private transactions last year and more than $132 this year. The company’s potential valuation is based on a combination of stock price and how many shares it has outstanding.
      The prices shared by Spotify suggest a range of $6.3bn to more than $23bn.

      http://www.bbc.co.uk/news/business-43235317

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