Two Disparate Updates On Spotify
4 April 2018
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1. Spotify + 8tracks
Spotify has continued to implement new changes and announce upcoming deals since filing their IPO in February. Most recent is their partnership with 8tracks, with a plan to bring a new feature to 8tracks’ mobile iOS app. 8tracks (which is like a SoundCloud equivalent) will now be able to deliver music in a more organized way to their users, by offering the ability to automatically save favorited songs and transfer them to Spotify on a special playlist called “8tracks Discoveries.” Now Spotify users will be able to access those cool remixes without any hassle. Platforms like SoundCloud and 8tracks are geared towards the less commercial tracks, like the small DJs and emerging rappers that have only 100 streams. However, with this partnership, these younger artists may benefit by getting more views. This is an interesting new move for Spotify as it continues to make waves in the music industry and Wall Street.
Before Spotify was officially on the market, various observers and investors feared their stock would be rocky. Their stock was surely not perfect yesterday and traded in a wider range than other big tech companies. However, Spotify's move to go public looks promising. Currently, SPOT stock is down 5.7% at $140.48, although they opened yesterday at $165.90, trading as high as $169.00. It then closed at $149.01. But all in all, Spotify's stock traded well considering the numerous doubts surrounding their direct listing. At this scale, it was an untested experiment, but "it worked and worked well" (Colin Stewart).
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2. Spotify on Wall Street
A few days ago, Digital Music News reported that Microsoft was acquiring Spotify in a $41.8 billion equity deal, despite their public listing. This was an April Fool's day post and I almost fell pray to it. However, despite it simply being an awful joke, it did highlight Spotify's (SPOT) exciting New York Stock Exchange debut, which occurred on Tuesday, April 3rd.
Wall Street’s banks made money on Spotify’s offering, just not as much as they would have if the company had filed a traditional IPO. Spotify did a direct listing deal, which is a little unorthodox, but it was cheap and fast. It saved the company millions of dollars, "while still giving its employees and early investors the chance to cash out."
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