Spotify-IPO

Spotify’s ‘gone public’ – here’s what that means

It's trying to convince investors it's as big as Netflix

Like many other big companies before it, Spotify's decided to sell its shares on the public stock market to raise lots of money.

What it means: The financial press are really interested in this one. Spotify's chosen to do its share selling thingy in a non-traditional way. In a nutshell, Spotify wanted to avoid hiring lots of expensive banks to manage the process and value the price of its shares so it did it all itself.

The stock market kind of acts as a test of how other people think a business is going to do: investors are essentially betting on whether they think the business (and therefore their shares) are going to get more valuable.

Lots of analysts were judging Spotify's appearance as a first chance for investors to bet on the recovery of the music industry. Is the new streaming model going to be profitable in the long term?

People will be watching closely to see if Spotify goes the same way as Netflix (mahoosive). So far, it didn't perform as well on its first day of trading, but Spotify will try and convince investors that its subscription-based streaming service is a tried and tested model.

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