Spotify listed it's shares today on the NYSE. At the price at the close it had a market cap of $26.37 Bn for a company that generated $3.25Bn in revenues in 2017 (so trading at 8.1X Revs). Of course it is not profitable (lost $365 million at EBITDA level, $426 million at EBIT level, and $1,393 million at net income level, equating to -$7.58 EPS). Topline did grow 41% in 2017 and is expected to grow again by 40% in 2018, but even at $6.4bn in forecast revenue for 2018, the estimates are still for significant losses at EBITDA, EBIT, and EPS lines. Gross profit margins at 15.5% (very low) tell you how substantial content acquisition costs are, and with thin gross profit margins and customer acquisitions costs that the company has not been able to scale down even as a $6bn revenue company, then, it's hard to see at what level these guys will become profitable. Certainly can't see it happen until they halt their growth and reduce the sales and marketing expenses associated with acquiring customers.
Not sure any of the tech giants would want to buy them as the music streaming business is structurally poor (Pandora, Spotify, Apple, Amazon, TIDAL, etc...) - lots of competitors, razor thin gross profit margins, and studios (content owners) retain the economic leverage in the value chain.
