Streaming-music giant Spotify on Wednesday officially filed paperwork with the U.S. Security and Exchange Commission for a public offering, according to a report by CNBC. The company will offer shares up to $1 billion and will trade under the symbol “SPOT” at the New York Stock Exchange. CNBC reports that the company has a potential valuation of $23 billion.
The company is targeting a $1 billion IPO, though it is eschewing the traditional fundraising effort. Rather than sell shares directly to the public, Spotify will offer a “direct listing,” or a series of transactions from existing shareholders to investors. Last year, Spotify earned almost $5 billion in revenue, a near 40 percent increase from the $3.6 billion it earned in 2016. According to Music Business Worldwide, however, the company posted a loss of approximately $1.4 billion. In the full document posted on the SEC website, which you can view here, the company notes in regards to its profitability:
We have incurred significant operating losses in the past, and we may not be able to generate sufficient revenue to be profitable, or to generate positive cash flow on a sustained basis. In addition, our revenue growth rate may decline.
Also in the paperwork, Spotify claims to have 159 million monthly active users, with 71 million premium subscribers as of Dec. 31, 2017. Spotify has been in a user-base fight with its leading competitor, Apple Music, and earlier this month, Billboard reported that the number of Apple Music subscribers in the U.S. is expected to equal, if not overtake, Spotify by summer.
Billboard also reported that Spotify currently has around 17 percent of the market of overall music purchases from U.S. record labels, while Apple Music has about 15 percent.