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Rumor Fact(ory): Spotify and Tencent reportedly negotiating a stake swap ahead of public listings

Spotify is reportedly in talks with China’s Tencent Holdings about a potential swap of stakes in advance of both companies’ planned public listings. The possible development first appeared in the Wall Street Journal (paywall), which reported that the two businesses trade stakes of up to 10%. According to the WSJ’s sources, such a deal would also align Spotify and Tencent in future licensing agreements with the major labels. Both companies have declined to comment to additional publications.

Those stakes could be mutually beneficial if they are secured, as both companies are projected to be valued in the billions when they do list publicly. These two companies have long been rumored to have plans to go public. Spotify has been edging around a possible direct listing on the New York Stock Exchange for most of 2017. Tencent had been rumored to be spinning off its China Music branch at least since August. Their possible cooperation also appears to be in the early stages, but we will be following this connection closely as Spotify and Tencent move toward their next big steps.

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Anna Washenko

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