Music streaming service Spotify will carry out a direct listing on the New York Stock Exchange when it goes public later this year or early next year, a source familiar with the situation said on Friday.
The move is a major test of the process of direct listing, which eliminates the need for a Wall Street bank or broker to underwrite an initial public offering (IPO) and the fees associated with that. If successful, it could change the way large companies think about IPOs.
Spotify is valued at $13 billion, the source said.
The Swedish company is working with investment banks Morgan Stanley (MS), Goldman Sachs (GS), and Allen & Co, the source said.
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Spotify and the New York Stock Exchange declined comment. The investment banks were not immediately available for comment.
The direct listing will give Spotify employees the ability to cash out their holdings without the company having to pay the underwriting fees traditionally involved in an IPO.
That is seen as a hit to investment banks that rely on underwriting fees from marquee listings such as Spotify, particularly as the number of IPOs has declined recently.
