Tag Archives: Listing
LONDON/NEW YORK (Reuters) – Spotify Technology SA (SPOT.N) shares surged following the largest-ever direct listing on Tuesday, giving the world’s leading streaming music service a market value of nearly $ 30 billion.
Shares opened at $ 165.90, up nearly 26 percent from a reference price of $ 132 a share set by the on the New York Stock Exchange late on Monday.
Spotify’s unusual route to publicly trading its shares via a direct listing rather than a more usual initial public offering will likely be watched by other companies tempted to list without selling new shares, and by bankers that could lose out on millions of dollars in future underwriting fees.
Some 14 million shares had changed hands within an hour after trading began on Tuesday. Nearly 91 percent of Spotify’s 178 million shares were tradable, a much higher percentage than typical in a traditional IPO.
Some market-watchers cautioned investors not to read too much into the first-day pop, given the mixed performance of recent tech IPOs.
Spotify’s debut came on the heels of a steep U.S. equity selloff led by tech stocks, although the market had found firmer footing at midday on Tuesday.
“It’s a fair market price. It’s not manipulated or set by any puts and takes by banks or institutional investors,” said Chi-Hua Chien, an early investor in Spotify who is now at San Mateo, California-based Goodwater Capital.
Spotify shares were last at $ 160.32, up 21 percent.
The NYSE had set Spotify’s reference price late on Monday, giving an early estimate of the level at which supply and demand could be balanced.
That was in line with informal trading on Monday, with shares changing hands at about $ 132, which would value the company at more than $ 23 billion.
Since launching its streaming music service a decade ago, the Stockholm-founded company has overcome heavy resistance from big record labels and some major music artists to transform how the industry makes money.
Spotify offers access to vast libraries of music rather than making users pay for CDs or downloads of individual albums or tracks.
The company has structured the listing to allow existing investors to sell directly to the public while offering no new shares of its own.
Analysts had flagged concerns that forgoing hiring investment banks as underwriters or holding traditional promotional events with institutional investors could mean volatility in Spotify shares once formal trading kicked off.
Spotify’s opening public price was determined by buy and sell orders collected by the NYSE from broker-dealers.
Based on those orders, the price was set based on a designated market maker’s determination of where buy orders could be matched with sell orders.
While Chief Executive Daniel Ek skipped NYSE rituals such as opening bell-ringing and trading floor interviews to tout the stock, the front of the 115-year-old Greek Revival exchange building was draped in a vast green-and-black Spotify banner.
Additional reporting by Helena Soderpalm in Stockholm, Joshua Franklin in New York and Stephen Nellis and Salvador Rodriguez in San Francisco; Editing by Meredith Mazzilli and Bill Rigby
JERUSALEM (Reuters) – Desilu Studios plans to go public in the United States as a second stage of a proposed acquisition of Israeli technology start-up Vonetize.
The U.S. film studio famous for producing classic shows such as “I Love Lucy”, “Star Trek” and “The Untouchables” said on Friday that it had agreed a deal to take a controlling stake in Vonetize, the share price of which jumped 75 percent on Sunday.
Vonetize, whose technology enables over-the-top (OTT) live channel streaming and on-demand services, operates in 60 countries and has global partnerships with LG, Disney, Warner Brothers, Fox and Sony Universal among others.
Desilu said it had bought a 10 percent stake in cash from controlling shareholders at a company valuation of $ 50 million and received an option to buy a further 44 percent in the next 12 months.
Vonetize said on Sunday that Desilu would list in the United States to finance the deal for the rest of its proposed stake in the Israeli business.
Another route could be that Vonetize would dual-list on Nasdaq this year and then merge Desilu into that listing through a share-swap transaction, said Vonetize CEO Noam Josephides.
Some 40 percent of Vonetize’s shares are in free float.
Josephides said that Vonetize already has approval for a Nasdaq listing this year but a decision had yet to be reached.
Reporting by Steven Scheer; Editing by David Goodman
LONDON/SAN FRANCISCO (Reuters) – Streaming music leader Spotify said on Thursday it has a clear path to profit as it spelled out to investors its growth plans and how it aims to fend off big rivals Apple Inc and Amazon.com Inc ahead of an April 3 listing.
Chief Executive Daniel Ek made a direct pitch to retail investors during a public webcast that stood in place of a traditional closed-door “road show” typically used to woo institutional investors in initial public offerings (IPOs).
The Stockholm-based company’s stock will hit the public markets in a unusual direct listing without traditional underwriters. Spotify must convince investors that its business is sound and that investors who buy shares in the public market debut won’t be hurt by unexpected volatility.
“You won’t see us ringing any bells or throwing any parties,” Ek said. “Since Spotify isn’t selling any stock in the listing, we’re really entirely focused on the long-term performance of the business.”
Ek portrayed Spotify as an underdog not tied to a major technology company. He pointed out that Spotify has more than twice as many paying users as its nearest rival, Apple, and that its strategy is to be an ubiquitous music service across phones, smart speakers and desktops from various makers.
Because the company will not issue any new shares, it did not specify a listing price. Based on private transactions, it is valued at roughly $ 19 billion, according to Reuters calculations. It has hired brokerage Morgan Stanley to match buy and sell orders to set its opening trading price.
Spotify has warned investors it faces a variety of risks.
It says the royalty costs it pays to artists and publishers are so difficult to calculate that in the past it has been unsure how much it owed, prompting what are known as “material weaknesses in internal controls” for each of the past three years with the danger of more in the future.
In addition, its music services are primarily delivered over devices such as Apple’s iPhone and Amazon.com’s Echo series of speakers, which could emphasize their own services over Spotify’s.
“Operating losses have grown with revenue, but the trend towards profitability is clear when you look at operating losses as a percentage of revenue,” the company said in the presentation in New York.
Revenue grew 39 percent to 4.09 billion euros ($ 5.04 billion) in 2017 from 2.95 billion euros in 2016, it said in a securities filing. At the same time, net financing costs of 855 million euros pushed up operating losses to 378 million euros from 349 million euros.
Reporting by Eric Auchard in London and Stephen Nellis in San Francisco; Editing by Susan Thomas and Peter Henderson
DUBAI (Reuters) – Careem, a Middle East competitor to Uber Technologies [UBER.UL], said on Sunday it had acquired RoundMenu and would start trialing food delivery services through the restaurant listing and reservation online platform this month.
The Dubai-based ride hailing firm acquired the website and app for an undisclosed sum.
“Careem will begin testing a delivery capability for RoundMenu customers on a small scale later this month,” it said in a statement to Reuters.
RoundMenu has a presence in 18 cities across nine Arab countries, including Saudi Arabia, the United Arab Emirates, and Egypt, according to its website.
There is demand for delivery services in the Middle East, particularly in the Gulf Arab states where temperatures can soar above 50 degrees in the summer.
Several food delivery companies, including Talabat, Zomato, UberEats, and Deliveroo, are active in the region.
RoundMenu has raised $ 3.1 million in funding since it launched in 2012, the Careem statement said.
Careem said in June it would accelerate expansion plans after raising $ 500 million from investors, including German carmaker Daimler and Saudi Arabia’s Kingdom Holding.
In July, it took a minority stake in an Egyptian start-up that connects commuters with private buses in Cairo.
Reporting by Alexander CornwellEditing by Shri Navaratnam
SHANGHAI/BEIJING (Reuters) – Chinese internet search firm Baidu Inc posted a forecast-beating quarterly revenue increase and unveiled a U.S. listing plan for its Netflix-like video platform iQiyi as it looks to rev up new drivers for growth.
Baidu posted on Tuesday fourth quarter revenue of 23.6 billion yuan ($ 3.72 billion), up 29 percent against the same period a year ago and topping analysts’ forecasts of 23.05 billion yuan and the company’s own guidance.
The strong results are a major fillip for Baidu as it looks to ramp up spending on riskier gambles in autonomous driving and fend off cashed-up rivals such as Tencent Holdings Ltd and Alibaba Group Holding Ltd in online video content.
A U.S. listing would bring extra financial muscle for its popular iQiyi platform as it ramps up spending. Baidu said the size of any IPO was not yet set, but that it would likely remain iQiyi’s controlling shareholder. iQiyi could be worth $ 8 billion or more, according to Reuters Breakingviews.
“An IPO will bolster iQiyi’s position in the market and give it more cash to buy content or make content on their own,” said Ni Shuang, Beijing-based Pacific Securities analyst, adding it would help Baidu keep pace with rivals in the space.
The strong quarterly showing – driven by the core search and news feed businesses – is also key to generating cash flow “to fund our new AI businesses”, Baidu chief executive Robin Li told a post-earnings conference call.
The company’s shares rose nearly 5 percent in extended trading after the results, overturning a nearly 4 percent fall since the start of the year.
Herman Yu, the firm’s chief financial officer, said content costs rose 70 percent last year to 13.4 bln yuan as iQiyi acquired content. These costs would rise at a similar pace this year.
The firm will also raise R&D spending in areas like its Apollo open-source software platform for autonomous driving, which executives said would eventually become a “very material and significant revenue source for the company”.
“Having said that, a key caveat is that this market will take time to build,” chief operating officer Qi Lu told the conference call.
Strong results in its more traditional businesses were central to Baidu’s success, with revenue from its core online marketing – including its search platform and news feed – jumping 26.3 percent to 20.4 billion yuan.
The results will help soothe Baidu investors as the company looks to turn around its fortunes after a series of missteps sparked steep losses in 2016 and hit its advertising revenue from internet searches.
Baidu, part of China’s trinity of tech giants along with Alibaba and Tencent, posted net income of 4.16 billion yuan in the quarter ended Dec. 31, up from 4.13 billion yuan a year earlier.
Excluding one-time items, the company earned 14.9 yuan per ADS, above forecasts.
Baidu pegged its guidance for first-quarter revenue growth, between 19.86 billion yuan and 20.97 billion yuan, a 25-32 percent increase against the same period of 2017. That compared with analysts’ average estimate of 21.18 billion yuan.
Reporting by Adam Jourdan in SHANGHAI, Pei Li in BEIJING and Arjun Panchadar in BENGALURU; Editing by Eric Meijer and Muralikumar Anantharaman