Spotify has finally filed to go public. But unlike most tech offerings, Spotify won’t be raising any money by issuing new shares. Instead they’ll just allow existing shares owned by investors and employees to be traded publicly on the New York Stock Exchange.
No IPO means there are no investment banks to underwrite and price the offering, meaning the public markets will essentially be the only thing determining what Spotify shares will be worth when they start trading.
However, Spotify’s F-1 registration does disclose what its shares have historically traded for on the private market. The most recent private transactions should give us a pretty good indication of what shares will be worth when they start being publicly traded.
As you can see in the chart below, in 2017 Spotify shares were bought and sold privately for anywhere between $125.00 and $37.50, which is a pretty wide range. But in the last two months the value has become a little more defined, with shares trading anywhere between $132.50 and $90 in January and February 2018.
That means we can expect shares to trade somewhere in this range when Spotify goes public, with the price likely leaning towards the higher end ($132.50) to account for the increased demand once they are available to a broader investor base.
Of course the more demand there is the higher the shares will trade, and since Spotify’s public offering has been much anticipated don’t be surprised if we see share prices closer (or upwards) of $150.
In it’s F-1 registration, Spotify notes that these share prices and amounts all reflect a 40-to-one share split, which the company says is being done to “reduce the per share price of our ordinary shares to a more customary level for a newly listed company on the NYSE”.
Of course the above numbers are just historical pricing, and legally can’t be an indication of what Spotify actually thinks their shares will be worth. Spotify confirms this, saying “this information may, however, have little or no relation to broader market demand for our ordinary shares and thus the opening public price and subsequent public price of our ordinary shares on the NYSE”.
Expect to see Spotify shares actually start trading on the NYSE in the next month or so, under the ticker “SPOT”.