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Tomorrow, Spotify’s direct listing will kick off per the company’s prior notes. The impending results may become a critical event in the tech world.

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Unicorn liquidity has long underperformed paper gains. Why that is the case isn’t hard to grok: turning assets into liquid gains often requires the public market, and IPOs over the last few years have been scarce.

Enter Spotify’s non-IPO, which, if successful, could聽encourage other startups reticent to pursue a traditional IPO to go public using a direct listing. (It could also do the opposite, no one really knows.)

Given that question mark, and a number of others, what follows are some thoughts on Spotify as it waits out the last hours of its life as a private company.

(Lack Of) Price Clarity

In a traditional IPO, the company in question prices, sells a large bloc of shares, and then begins to trade. The pricing dance (which takes several steps) is then followed by orders until a final, opening price is decided.

Spotify only has historical, private trades to help set expectations for its per-share value and the price range of those trades is enormous. 聽on the company’s most recent private market transactions:

As you can see in the chart below, in 2017, Spotify shares were bought and sold privately for anywhere between $125.00 and $37.50, which is a pretty wide range.聽But in the last two months the value has become a little more defined, with shares trading anywhere between $132.50 and $90 in January and February 2018.

We might as well throw a damn dart.

Will Anyone Sell?

Bloomberg’s Matt Levine . He noted that if “not much stock changes hands on the first day then you have a weird situation where the public market for Spotify is a tiny fraction of its market capitalization.” A limited float could lead to dramatic price swings, as the supply side of the supply-demand equation would be more limited than in a traditional offering.

Tight supply could lead to sharp price fluctuations and potentially a public float that grows in relation to share price increases, resulting in chronic rise-fall gyrations of Spotify’s market cap.

However, if a lot of Spotify shareholders decide that they’d like to buy houses and the like, then the market could be overburdened by non-locked-up shares, driving the price down. Instead of a limited supply (the inverse of what we saw in the preceding example), panic-induced selling from extant shareholders could result, harming Spotify’s value in the market.

Regardless, we don’t really know how much demand there is for Spotify shares as the firm isn’t selling a bloc before it begins to trade at a price that we understand. The scuttlebutt聽around the net seems to be that quite a lot of people are going to want to pick up shares. So demand could be quite high, or it could be low.

And, of course, there won’t be banks on hand to help stabilize the price of the company’s shares.

Lots Of Questions

If that felt like more uncertainty and shrugging from us than usual, it’s because no one seems very certain about what will happen tomorrow鈥攁side from Spotify’s CFO. The executive appears dead-set on a direct listing as the right move Indeed, , the following stuck out regarding the CFO’s push to pursue a direct listing instead of a traditional IPO for Spotify:

But people who know McCarthy say he does not care about the broader implications of his plan 鈥� he isn鈥檛 motivated by some ideological crusade to stick it to Wall Street, nor by some high-minded attempt to chart a new future for the technology sector.

鈥淚 don鈥檛 think it鈥檚 a middle finger to Wall Street because he comes from Wall Street,鈥� said Reed Hastings, the CEO of Netflix, where McCarthy was its CFO for eight years. 鈥淗e鈥檚 as Wall Street as it gets.鈥�

So this isn’t a vendetta, at least聽not according to Hastings. It’s a business choice. As such, we’ll be able to grade it tomorrow on the measure of its dollars.