The major record company owned 5.7% of Spotify’s stock – a total of 10,164,560 shares – before the streaming platform went public on April 3.
Sony then sold 17.2% of these shares on the New York Stock Exchange during Spotify’s opening 24 hours of trading – generating $260m.
Today, an update: MBW has learned that, ahead of its earnings announcement last Friday (April 27), Sony cashed in a further chunk of shares.
The company told investors last week that it had sold “approximately half of the shares we owned from the listing date until now”.
There was no confirmation of the exact value of these shares, but according to MBW analysis, in total they would have been worth somewhere between $740m and $790m.
That’s because Spotify’s NYSE share price fell to a daily low of $144.32 on April 6, and reached a high point (before April 27) of $158.45 on April 20.
We already know that Sony cashed in 1,748,304 shares on April 3 (the 17.2%) which would leave 3,333,976 shares (32.8%) remaining within a 50% tally of its total holdings.
With the 17.2% fetching $260m, the remainder of the 50% would have added between $481m (at $144.32 per share) and $528m (at $158.45 per share). That’s approximately $750m in total.
“Sony Music and The Orchard are committed to sharing with their artists and distributed labels any net gain they may realize from a sale of Sony Music’s equity stake in Spotify.”
Sony Music Spokesperson
Sony Music has previously confirmed that it will share these proceeds with both its artists and its distributed labels.
A Sony Music spokesperson told MBW: “Sony Music and The Orchard are committed to sharing with their artists and distributed labels any net gain they may realize from a sale of Sony Music’s equity stake in Spotify. This is consistent with our previously announced policy of sharing breakage and equity proceeds from digital catalog licenses with our artists and distributed labels.”
Sony Corp told investors last week that it expects to ‘record an approximately 100 billion yen gain’ from the sale of its Spotify shares. At current exchange rates, that’s worth $911m.
Sony Corp says it will record this profit under ‘other income’ in its FY2018 results, covering the year to end of March 2019.
Spotify’s share price has today (May 1) reached an all-time high of $163.90, following positive analyst forecasts.
At that price, the remaining 50% of Sony’s initially held shares (5,082,280) would be worth a further $833m.Music Business Worldwide