New York/San Francisco — Spotify Technology’s unusual stock market debut on Tuesday levels the playing field for individual investors who are normally at a disadvantage in traditional listings but could also make them more vulnerable to swings in the music streaming service’s share price. The Swedish company is skipping a conventional initial public offering (IPO) and listing shares directly on the New York Stock Exchange with almost none of the safeguards provided by investment banks that would normally manage the process. Spotify is forgoing the security of having bankers with a financial interest in its success, which will save it millions of dollars in fees to underwriters. The direct listing gives Spotify insiders a chance to sell their shares, but the company will not be selling any new stock to raise money. In a normal IPO, underwriters promote a company to institutional investors weeks in advance, using road shows and meetings to gauge appetite for the stock. They use that i...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.