Per a WSJ article in January, Spotify has retained investment bankers (reportedly paying them $30MM) to help ascertain interest from large institutional investors, tell the investment story, et cetera. Given that, I imagine that they will advise the company and its pre-IPO shareholders on an indicative price or price range.
Also, I would be hard pressed to imagine that they would not nominate a stabilization agent to help deal with the issues that you noted so that they manage price volatility in initial trading.
> As this listing is taking place via a novel process that is not an underwritten initial public offering, there will be no book building process and no price at which underwriters initially sold shares to the public to help inform efficient price discovery with respect to the opening trades on the NYSE. Pursuant to NYSE Rules, we have engaged Morgan Stanley & Co. LLC (“Morgan Stanley”) as a financial advisor to be available to consult with the designated market maker (the “DMM”) in setting the opening public price of our ordinary shares on the NYSE.
Morgan Stanley will be involved to help set the price with the market maker (sounds normal), but:
> However, because Morgan Stanley will not have engaged in a book building process, they will not be able to provide input to the DMM that is based on or informed by that process. Moreover, prior to the opening trade, there will not be a price at which underwriters initially sold ordinary shares to the public as there would be in an underwritten initial public offering.
So they didn't get hired to do a road show and won't have interest from institutional investors. As for having a stabilization agent? It sure doesn't sound like it:
> This lack of an initial public offering price could impact the range of buy and sell orders collected by the NYSE from various broker-dealers. Consequently, the public price of our ordinary shares may be more volatile than in an underwritten initial public offering and could, upon listing on the NYSE, decline significantly and rapidly.
Interesting, thanks - I did not have a chance to read through the full F-1 yet when I wrote the below, so apologies for the incorrect statement on my part regarding the stabilization agent and roadshow given the limited scope of engagement that bankers have on this listing.
Also, I would be hard pressed to imagine that they would not nominate a stabilization agent to help deal with the issues that you noted so that they manage price volatility in initial trading.