Financials Report: Sony To Reject IPO Proposal, Spotify Revenues Increase
Sony Corp. is set to reject an initial public stock offering proposal for its entertainment unit by hedge fund Third Point, according to a report by Japanese news outlet Nikkei. Nikkei first reported the rejection plans, after which shares of Sony Corp. to drop by approximately 3 percent. According to Bloomberg, a Sony Corp. spokesperson has said Sony’s board and management will continue to review the proposal.
Third Point possesses 6.9 percent of Sony Corp.’s shares. The company proposed to sell a maximum of 20 percent of Sony’s music, film and television divisions to the public in an initial public offering.
The music division reported a 13.3 percent revenue increase of $1.13 billion in the second quarter, according to Billboard. There was also a 48.1 percent operating income of $109 million. Due to a weak yen, however, the division’s sales were “essentially flat,” compared to 2012’s second quarter.
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Spotify reported approximately $578 million in revenue last year, according to the New York Times. That marks a 128 percent increase from 2011, according to a filing from Spotify’s Luxembourg holding company. However, the company also lost $78 million last year, up from $60 in 2011.
The company offers millions of songs for free and through monthly $10 subscriptions, thus eliminating ads and offering features not available to users who do not pay for a subscription. Spotify is now in 28 markets worldwide; in March the company reported it had 24 million active users (including a quarter of them being paying customers).
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