Swedish Spotify Duo Could Be Worth $2.4 Billion After Listing
Music-streaming service Spotify’s Daniel Ek is poised to join his Swedish co-founder as a billionaire.
(Bloomberg) -- Spotify Ltd.’s Daniel Ek is poised to join his Swedish co-founder as a billionaire, as long as the company’s value established in recent private trading holds up during an unusual public listing.
Ek owns 9 percent and Martin Lorentzon has 12 percent of the music-streaming service excluding warrants, according to a regulatory filing Wednesday. Their holdings would be valued at $1 billion and $1.4 billion, respectively, if the shares trade at the $64 average that investor Tencent Holdings Ltd. paid for a stake in recent months.
Ek, 35, still may fall short of the billion-dollar mark as the company shuns a traditional initial public offering. Instead, the opening public price of its ordinary shares on the New York Stock Exchange will be determined by buy and sell orders collected on the day of the listing, the company said in the filing.
In 2017, private trades valued the company at $6.3 billion to $20.9 billion. So far this year, its value climbed as high as $23.4 billion. A valuation of about $10 billion after the first day of trading would make Ek a billionaire, according to the Bloomberg Billionaires Index.
That’s not the only way the listing differs from its peers. Absent from the filing are large one-time awards of stock, or promises of big grants in conjunction with an IPO, which tech companies often grant top executives.
Snap Inc., for example, revealed in its IPO filing last year that Chief Strategy Officer Imran Khan received stock worth about $145 million in 2015 after he joined from Credit Suisse Group AG. The social-media company also said CEO Evan Spiegel would get stock equal to 3 percent of Snap’s shares at the close of the IPO -- worth $636.6 million when granted.
When Facebook Inc. went public, CEO Mark Zuckerberg held 120 million stock options that ballooned in value to $4.55 billion at the $38 listing price. Jeff Weiner of LinkedIn Corp. held options worth $150.3 million at the $45 offering price.
Ek stopped receiving a salary on July 1 but is eligible for an annual bonus of up to $1 million if certain performance goals are met. He collected the full amount last year. He’s got an employment agreement that expires when he turns 65, which is in about three decades.
However the listing proceeds Ek and Lorentzon will keep control. The filing confirms they are the sole owners of beneficiary certificates that gives them 80 percent of the voting rights.
--With assistance from Alex Barinka and Lucas Shaw
To contact the reporters on this story: Tom Metcalf in New York at tmetcalf7@bloomberg.net, Anders Melin in New York at amelin3@bloomberg.net.
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum
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