resharker

Convertible debt as to not dilute the share pool. As is typical, there are also financial incentives to VPs to make the IPO happen in time. It would be very interesting to know if the lenders of the 1B anticipated this and are planning to immediately offload their highly discounted stock before shredding the company to pieces for their 1B. Might be hard, considering the massive liability they're taking on with the new New York office.

Not particularly when you consider that Spotify's contracts with content providers obligate a 70% cut. The skunkworks projects to capitalize on data/ads/listening behavior/etc. have not cumulated into considerable value for the company. The focus for the company has been and always will be GROWTH in the form of monthly active users. Streaming music will never be a cash cow. The margins aren't there.

I work for Spotify and I can tell you the company's spending is completely out of control. Between throwing parties where they fly every single employee out to Sweden to party or purchasing Echo Nest, only to ditch the tech later for in-house tech (Discover Weekly), they really have no clue how to manage their capital. We have nearly 2000 employees and no roadmap for profitability. Talk of an IPO has been ongoing since 2013 and employees can barely invest in the ESOP since the share price is so ridiculously priced at over $1000 a share.

Spotify has postponed the inevitable by granting shares of the corp to the companies they license music from. However, the time will come when the larger institutions want their money back and it's not going end pretty. They need to reduce their liabilities and reduce headcount ASAP.