Spotify Said to Lean Toward Direct Listing on N.Y.S.E.

Should Spotify list directly, it probably would do so at a valuation of about $13 billion, one of the people who had been briefed said.

Spotify has already hired the investment banks Goldman Sachs, Morgan Stanley and Allen & Company to help weigh its options, which could still include pursuing an initial offering, the people said.

A spokeswoman for the company confirmed the hiring of the banks as advisers, but declined to comment on its plans, which were reported earlier by CNBC.

By eschewing an I.P.O., Spotify would signal that it is not going public to raise additional money. It has already raised more than $1.5 billion since its founding in 2006, and was valued at $8.5 billion two years ago.

That valuation has risen. Spotify, which has bought back stock from its employees over the years, conducted its most recent round of buybacks from mid-February to mid-March, at a valuation of about $9 billion, one of the people briefed on the matter said. Since the Universal music deal, its value has risen to about $13.3 billion.

Its fortunes have also differed from those of other music services. Last week, Pandora announced that it had taken a $150 million investment from Kohlberg Kravis Roberts amid pressure from investors to improve operations or sell itself.

By contrast, Spotify has continued to shore up its business to prepare for life as a public company. Last month, it struck a long-awaited agreement with Universal Music Group — the biggest record company and the home of Drake, Lady Gaga and U2 — that could pave the way for similar deals with Warner Music and Sony.

As of 2015, Spotify recorded $2.2 billion in revenue, but lost $194 million.

A direct listing on the Big Board would be a much faster process than an initial offering. And it would free Spotify from restrictions that fall upon those pursuing the traditional route, which include limitations on what executives are permitted to say about future business performance.

In a direct listing, underwriters — who pitch prospective investors on shares in the market debutante and compile the order books for the stock — are not strictly necessary. And banks would lose out on underwriting fees.

But Goldman, Morgan Stanley and Allen could help introduce major mutual funds and other investors to the company and help smooth the process.

A direct listing has downsides. Underwriters who manage the sale of shares can help reduce sharp price swings, which is not possible when companies simply open their stock for trading.

A vast majority of companies generally pursue an initial offering, though some have chosen to put twists on the process. Google used a version of a Dutch auction in its 2004 listing, in an effort to attract more individual investors and avoid a sharp price swing. Instead, it ended up…

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