Silicon Valley, Wall Street taking notes on Spotify debut........

SPOTIFY Technology SA's unusual route to becoming a public company is a test case for other  multibillion-dollar tech companies that are looking to sell their shares but are not in need of cash.

On Tuesday, investors will be able to buy and sell shares in the Swedish music streaming service in the New York Stock Exchange's first-ever direct floor listing.

This is without Spotify having hired investment banks as underwriters and undertaking an investor road shows as is typical in a traditional public offering {IPO}.

If it goes well, other highly valued tech firms expected to pursue a listing in the future, with the likes of US ride hailing companies UBER Technologies Inc and Lyft Inc, could look to adopt a similar approach.

Wall Street banks could also be seeking feedback from investors on the day, and are looking to come up with ways to make up at least part of the millions of dollars in potential lost underwriting fee revenue.

''Everybody is going to watch what will happen with Spotify,'' said Columbia Law School professor John Coffee, who focuses on securities regulation.

Given the listing's first-of-its-kind nature, observers will be watching to make sure Spotify's public market valuation does not plunge below previous private valuation and trading holds relatively steady.

Spotify can eschew a traditional IPO because it does not require fresh capital and is a popular consumer brand about which the investors do not need educating through a road show.

''This is a big moment for the venture capital industry,'' said Felix Capital managing partner Frederic Court, a European venture capitalist.

''It will enable billions to be returned to back to investors, which will release more capital into Europe.''

Spotify's direct listing also follows a mixed bag of recent IPOs by some of the so-called tech unicorns that had been worth at least $1 billion.

The research and publishing continues to Part-2.


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