Spotify wants to list its shares publicly

LONDON — Spotify Ltd., owner of the popular music streaming service, wants to list its shares on public exchanges without raising any new money, according to a person familiar with the company’s plans.

Spotify, which surpassed 50 million paying subscribers earlier this year, doesn’t feel the need to raise capital but wants to allow long-term investors and employees to cash out, said the person, who asked not to be identified discussing private information.

A direct listing would address those needs by letting investors buy Spotify shares from current owners on the open market. That approach would be different from an initial public offering, the more traditional route hot tech startups use to go public and raise money at the same time.

In a traditional IPO, a company offers a block of stock to new investors the night before they are available on public markets for a price determined by underwriters. The company files for the offering to raise new capital to fund expansion.

In a direct listing, Spotify wouldn’t raise money or use underwriters. A direct listing would help Spotify avoid some of the fees and hassle of an IPO, and wouldn’t have to dilute the existing shares of the company. The effort, if successful, could be a model for other startups wary of an IPO. MergerMarket reported on Spotify’s consideration of a direct offering earlier.