Spotify reportedly makes confidential filing for U.S. IPO

Music streaming service Spotify has filed confidentially for an initial public offering with the U.S. Securities and Exchange Commission (SEC) and is moving ahead with a direct listing in the first half of the year, a source familiar with the matter said on Wednesday.

If Spotify, which was valued at as much as $19 billion US last year, goes ahead with its plans, it would make it the first major company to carry out a direct listing, an unconventional way to pursue an IPO without raising new capital.

It also mainly eliminates the need for a Wall Street bank or broker to underwrite an IPO along with many associated fees and could change the way companies approach selling shares to the public.

The confidential filing was initially reported by news outlet Axios.

Spotify is the biggest global music streaming company and counts Apple Inc and Amazon.com Inc as its main rivals. Reuters has previously reported Spotify was aiming to file for an IPO in late 2017 and list with the New York Stock Exchange early this year.

Spotify could not be reached for comment.

Spotify was sued by Wixen Music Publishing Inc last week for allegedly using thousands of songs, including those of Tom Petty, Neil Young and The Doors, without a license and compensation to the music publisher. It was unclear what the lawsuit's effect would be on its IPO plans.

Wixen, an exclusive licensee of songs such as Free Fallin'by Tom Petty, Light My Fireby the Doors, (Girl We Got a) Good Thing by Weezer and works of singers such as Stevie Nicks, is seeking damages worth at least $1.6 billion US along with injunctive relief.

Spotify still intends to proceed with a U.S. direct listing in the first half of 2018, despite the lawsuit, according to a source familiar with the matter. It has filed for the listing confidentially with the SEC, with Goldman Sachs, Morgan Stanley and Allen & Co helping arrange it, the source added.