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Sony has offloaded about a half of its Spotify shares

By | Published on Wednesday 2 May 2018

Sony Music

Sony Music has already sold about half of its Spotify shares, according to the CFO of parent company Sony Corp, Hiroki Totoki, who spoke to the Wall Street Journal, and a financial statement from the entertainment and electronics conglom filed last Friday.

All three of the majors and indie label-repping Merlin secured equity in Spotify as a result of their initial licensing deals with the streaming firm, of course. The record companies are expected to cash in those shares at some point now that Spotify is listed on the New York Stock Exchange.

Of all the music companies, Sony had the most shares as Spotify listed last month. We already knew that it sold a small chunk of that stock on day one of trading. But, as of Friday, approximately half of those shares had now been sold.

Depending on exactly when Sony off-loaded said shares, it likely netted around 750 million of those lovely American dollars from the sale. Which is nice. Though the equity shifting also raises a similar number of questions as to how the major will now share that money with its artists and distributed labels.

Sony Music stressed again amid the hoo haa that surrounded the Spotify listing that it would share the profits of its equity sale with artists signed to its labels and independents distributed by its The Orchard label services division.

Which is great, though the devil will always be found in the detail. Artist managers, and music lawyers and accountants, are now awaiting with interest to see how the record company will share its Spotify equity profits with current artists and label clients, let alone artists and labels who have worked with Sony since Spotify went live, but whose music is no longer repped or controlled by the major.

Meanwhile, here’s some of that finance gubbins that big companies say in official filings: “Due to the public listing and the subsequent sale of a portion of [Spotify] shares owned by Sony, Sony expects to record an unrealised valuation gain for the shares Sony continues to hold after the listing and a realised gain for the shares sold, net of the estimated amount to be shared with its artists and distributed labels”.

And some more: “The sum of the unrealised valuation gain (net) and the gain on the sale of shares (net) to be recorded for the fiscal year ending 31 Mar 2019 is expected to be approximately 100 billion yen in total”. Make of that what you will.

In case you wondered, CMU is still a proud Spotify shareholder. We haven’t cashed-in quick and sold half our stock. Though, I suppose, you can’t sell half of a single share. As of last night we’d made $9.71 on our big Spotify investment.