Hanging over a Spotify IPO is the $1 billion in convertible debt that the company recently borrowed from Goldman Sachs, Dragoneer Investment Group, and Texas Pacific Group (TPG is also a Pandora lender, coincidentally–if you believe in coincidences). Let’s assume that loan is in dollars.
If you take into account the loan’s 5% interest rate and the value of the warrant coverage in the deal, Spotify is essentially paying credit card interest on $1 billion (that 5% rate escalates 1% every six months until it reaches 10%, or Spotify registers an IPO).
Source: Spotify IPO Watch: Brexit’s Bubble Bursting Bang – Artist Rights Watch