Spotify is eschewing the traditional IPO approach where the company typically raises money by hiring an investment banking syndicate to sell shares in an IPO. In traditional IPOs, the investment bankers usually receive a fee of 7% of the price of the shares that are sold in the IPO. As a direct listing, Spotify is not raising capital - it is simply registering its securities that will trade on the NYSE. The trade-off here is that by not raising capital in an IPO, Spotify won't have to pay the standard 7% underwriter fee (note that this 7% commission is typically lower in very large IPOs).
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