Will Spotify Go Public in 2017? -- Tech Roundup

Spotify is reportedly eyeing an IPO for the second half of 2017, while Apple looks like it may finally gain access to India.
By Bret Kenwell ,

Earlier this year, Spotify commanded a valuation of $8 billion when it raised $1 billion in a convertible debt offering. Now, according to sources, the music and video streaming service company is aiming to go public in the second half of 2017.

Will Spotify -- which has lost money in each of its last 10 years of operation -- be able to not only maintain its valuation but command an even higher one? That's the question, especially for early investors.

The whole point of investing in a private company is to get in before other investors. When the initial public offering rolls around, it gives the early investors a chance to get out of their investment, generally with a nice profit. But if the valuation is roughly equivalent or even lower than what investors paid in the first place, what is the point of getting in?

In an environment where stock valuations are high and interest rates are at historic lows, wealthy investors are struggling to find places to park their money. As a result, many have turned to private companies such as Spotify. As a result, the valuations of these companies are being driven higher.

Helping boost that Spotify valuation may be sales growth, which doubled to $2.2 billion in 2015. If Spotify can keep up that type of sales growth -- even with the overall losses -- it will likely come public with an even higher valuation.

As expected by those who have been even semi-following the self-driving auto industry over the past few years, several problems and many concerns have begun to arise following the fatal accident involving a Tesla (TSLA) - Get Report  vehicle that was using its Autopilot program in May.

Germany will try to bring black boxes to autonomous cars, while China has now banned highway testing for self-driving vehicles. At least for now.

China's auto regulator is currently working with police to try and put forth a set of rules for testing these vehicles, according to Bloomberg. The Ministry of Industry and Information Technology and the police force have reportedly drafted a set of rules, but until they are final they suggest automakers not test their systems on the highway.

Thus is there a delicate balance between governments trying to protect citizens safety while at the same time not stifle corporate innovation. It's not just China either. The U.S. -- with automakers from Detroit to Silicon Valley -- is trying to find a balance as well.

The technology of self-driving cars continues to fly forward. Its public perception and regulations that are having trouble keeping pace. 

Shares of Tesla closed at $228.36 Wednesday, up 1.4%.

Apple (AAPL) - Get Report has been trying and trying to get its foot in the door in India. Apple had applied for permission earlier in the year, while CEO Tim Cook went and visited the country and its regulators to help bolster his chances.

With more than one billion people in India, it's easy to see why Apple is trying to get in, even if its smartphones costs vastly more than many of the country's citizens can afford.

Well, it looks like those efforts will ultimately pay off, as India is expected to grant a three-year exception to some of its rules. It will allow Apple (and possibly others) to open up their own retail stores throughout the country.

While Apple already sells its products in India, it does so through other retailers, not on its own.

The problem had been, for Apple anyway, that they needed to source a significant amount of components from India in order to operate there. That was put in place to spur economic growth. However, the government had in place exceptions that it could use to grant some companies access.

Shares of Apple closed at $99.96 Wednesday, up 0.1%.

Apple is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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