Spotify Will Skip a Lot of IPO Essentials

Spotify.

What makes Spotify Ltd.'s direct listing different from a regular initial public offering? One difference is that, unlike in a typical IPO, Spotify will not be raising any money: It is listing its stock publicly so that its current shareholders can sell, but Spotify itself won't sell any stock on the first day. This is a difference from most IPOs, but it is not an essential one. There are plenty of IPOs where the company doesn't really need the money and insiders sell more shares than the company does. There is a lot of money in private markets, and big tech companies are staying private longer, and the result is that the pressure on companies to go public is increasingly likely to come from private investors who want to cash out rather than from the company's own need to raise money.