- Spotify just filed the paperwork for
- Like Snap, Facebook, and other tech companies that have gone the traditional initial public offering route, Spotify engineered a firewall to ensure the founders stay in control.
- Spotify has created a class of "beneficiary certificates" that carry voting power but no economic power.
- Spotify has issued 379.2 million shares to founders Daniel Ek and Martin Lorentzen, giving them over 80% of the voting power.
After a lengthy buildup, Spotify has finally filed for its direct public listing — the unorthodox process that circumvents the traditional Wall Street initial public offering process wherein
Spotify plans to list on the New York Stock Exchange under the ticker "SPOT," according to the company's F-1 filing with the Securities and Exchange Commission.
But once the shares are on the NYSE, technically anyone can buy them up. Spotify's founders, Daniel Ek and Martin Lorentzen, have engineered a class of super shares to ensure they retain control of the company, according to the SEC filing.
)
)
)
Spotify created a class of "beneficiary certificates" that carry voting power but zero economic power. They're worthless other than giving the holder one vote on company matters, and subject to certain exceptions, they will "
Ek and Lorentzen, who already own a combined 38.9% of the ordinary shares, will each receive 10 beneficiary certificates for every ordinary share they own, for a total of 379.2 million. That gives them just over 80% of the voting power in the company.
Spotify's beneficiary certificates will, in part, discourage any third-party from trying to buy up enough of the company to shake things up.
The filing puts it in plain English — Ek and Lorentzen will essentially have total authority:
"
The board can issue more beneficiary certificates — there are more than 1 billion remaining from the total authorized amount — but, of course, Ek and Lorentzen sit on the board and control the voting power, so they'll have a say in that matter, too.