Spotify secretly filed IPO documents with the Securities and Exchange Commission, according an Axios report released Wednesday. The music streaming platform reportedly filed the documents late last month. Spotify is hoping to list in this year’s first quarter, the report said.
Unlike other tech companies, Spotify is going after a direct listing, rather than a traditional float. The direct listing means the company will not turn to Wall Street and conduct an offering. Spotify’s direct listing move could change how tech firms go public in the future, depending on the outcome the streaming platform sees.
As of Wednesday no specific Spotify IPO date has been set.
The confidential filing comes after rumors of a possible IPO listing began during the summer when the streaming service passed the 60 million paid subscriber count. Spotify had more than 140 million active users as of June 2017. Meanwhile, Apple Music has more than 30 million subscribers, but the number seems to be growing. Apple CEO Tim Cook said in November that the service saw a 75 percent year-over-year increase in subscriptions.
Spotify’s listing would follow another tech company’s listing: Snapchat. Snap went public last year during the spring. Snapchat’s stock was up at $27 per share in March 2017, but the company hasn’t been doing so well. The social media platform’s price was at $15.21 as of noon on Jan. 3.
Spotify Hit With Lawsuit
Spotify’s IPO news came after it was revealed the company was sued for $1.6 billion over alleged copyright infringement. The motion was reportedly brought forward by Wixen Music Publishing on Friday. The lawsuit claims Spotify used songs without licenses and compensations. Wixen Music Publishing is looking to receive worth $1.6 billion for damages, along with injunctive relief.
Wixen Music Publishing holds music from well-known artists, including Tom Petty, Neil Young and Rage Against the Machine’s Tom Morello. According to the Hollywood Reporter, the suit said the streaming platform used Petty’s songs “Free Fallin” and “Light My Fire,” along with other songs, with no proper license and without providing reimbursements. The lawsuit also claimed that about 21 percent of songs in Spotify’s database were used without a license.
“Spotify brazenly disregards United States Copyright law and has committed willful, ongoing copyright infringement. ... Wixen notified Spotify that it had neither obtained a direct or compulsory mechanical license for the use of the Works. For these reasons and the foregoing, Wixen is entitled to the maximum statutory relief," the lawsuit reportedly said.