Spotify’s Unusual IPO Offers New Path for Tech Unicorns
Soon-to-be public Spotify is defining itself by what it won’t do.
It won’t engage in silly, self-congratulatory bell ringing on the day of its initial public offering. It won’t offer new shares to investors—only the shares of existing shareholders, who won’t be constrained by a traditional “lockup” period enforced by Wall Street underwriters. And it won’t market its IPO behind closed doors. Thursday Spotify took the highly unusual step of livestreaming its investor “roadshow” presentation in New York.
Whether Spotify’s shares sink or swim, these are tremendously exciting developments in part because they upend the established narrative of recent years. Many companies say they have no need to go public. Yet once they do they turn a financing event into an unseemly party. Spotify, which rakes in billions but doesn’t make money, is being clear about why it’s going public: so investors, including employees, can sell stock more broadly.
Spotify represents the next chapter of “unicorn” financing. As it pointed out in a video accompanying its presentation, it has raised ample capital and its stock has changed hands privately for years. There’s no need for faux secrecy either. I could never understand why companies about to sell shares to the public made their pitches behind closed doors. Spotify even is being upfront about when it will publicly release its financial forecast (March 26) and begin trading on the New York Stock Exchange (April 3) under the symbol SPOT.
Have a harmonious weekend.
This article first appeared in Data Sheet, Fortune’s daily newsletter on the top tech news. Sign up here.