Introducing the “Crowdfunding IPO”
Step aside, Snapchat. Spotify is taking a different path to the IPO.
Hear that? It’s the trendy sound of companies rejecting IPO standards, set to the tune of everyday investors getting access to new investment opportunities!
According to WSJ, Spotify, the streaming music service, is planning to go public with what some are calling a “crowdfunding IPO.” It’s called a “direct listing,” and it comes with much less fanfare and inflation than the IPO does. Instead of setting prices through banks, the Swedish company will rely on regular old supply and demand to set its price.
And the offering will be fully open to the public from the get-go — contrary to Snapchat’s recent IPO. In this way, Spotify will be sidestepping some traditional IPO pricing practices that have favored the rich in the past.