Music and podcast streaming service Spotify has confidentially filed to go public and list its shares directly to the New York Stock Exchange in the midst of a $1.6-billion copyright infringement lawsuit filed by music publisher Wixen Music Publishing Inc.
The Calbasas-based music publisher is suing Spotify for allegedly violating its copyright on more than 10,000 songs including tracks from Tom Petty, Neil Young, and Stevie Nicks. A hefty lawsuit like the one Wixen has filed could upset Spotify's existing investors and intimidate potential investors.
According to Axios, a person familiar with the matter said on Wednesday that Spotify privately filed paperwork for an initial public offering with the Securities and Exchange Commission. The company plans to list its shares directly on the New York Stock Exchange without issuing new shares or raising capital, allowing Spotify to go public while saving money on the expensive underwriting fees companies pay to investment banks when they hold an initial public offering. When it goes public, the music streaming giant could be worth $20 billion.
In the Wixen lawsuit filed on Friday at a U.S. District Court in Los Angeles, it asserts that Spotify failed to obtain one of two licences required to be able to distribute music. The lawsuit alleges that the company took a shortcut and did not get hold of the musical composition copyright for 10,784 songs published by Wixen, adding that the songs have been streamed billions of times in the software, but the music publisher never received revenue for it. Wixen is demanding injunctive relief and payment of $150,000 per song whose copyright were allegedly infringed, adding up to at least $1.6 billion.
In 2014, singer-songwriter Taylor Swift pulled her music from Spotify, taking offense that they were being offered free of charge.
"I think there should be an inherent value placed on art," Swift told Time "I didn't see that happening, perception-wise, when I put my music on Spotify. Everybody's complaining about how music sales are shrinking, but nobody's changing the way they're doing things."
In 2017, Swift made her music available on Spotify again.
