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Case Details

Case Code: FINC145
Case Length: 14 Pages 
Period: 2006-2018   
Pub Date: 2019
Teaching Note: Available
Price:Rs.400
Organization : Spotify Technology S.A.
Industry : Music Industry
Countries : USA, Sweden
Themes: Initial Public Offering
Case Studies  
Business Strategy
Marketing
Finance
Human Resource Management
Technology
Operations
Economics
Leadership & Entrepreneurship

The Spotify IPO

 

ABSTRACT

 
The announcement that the stock of the world’s largest music-streaming company, Sweden-based Spotify Technology S.A. (Spotify), was being directly listed on the New York Stock Exchange (NYSE) in April 2018 came as a surprise to market participants, but it was also viewed as a benchmark in the history of IPO listings, as the success rate in the case of direct listings was a rare phenomenon, according to stock market analysts. However, despite scepticism about the success of the process, Spotify’s stock traded on positive note on the opening day and as well on the subsequent days, marking the successful entry of the company into the stock market. The present case study provides the scope to discuss the concept of direct listing, the difference between direct listing and a traditional IPO, circumstances that favor the process of direct listing, and the risks associated with planning and executing direct listing. It also helps to unearth the issues that would help in choosing the right listing strategy for a company, especially technology companies and startups.
 
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Issues

The case is structured to achieve the following teaching objectives:
  • The difference between a traditional IPO and direct listing.
  • The circumstances that favor direct listing.
  • Risks of direct listing.
  • How to make a choice a between a direct listing and a traditional IPO.
Contents
INTRODUCTION
ABOUT SPOTIFY
BUSINESS MODEL
GOING IN FOR AN IPO
THE UNIQUE LISTING
LOOKING AHEAD
EXHIBITS

Keywords

Spotify; Initial Public Offering; Direct listing; Traditional IPO; NYSE; Corporate valuation; Financing Strategy; Traditional IPO; Private equity; Convertible notes

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