by Howard Haykin

Spotify, that popular music streaming service valued at $13 billion, announced intentions to go public. Tremendous payday for Wall Street investments bankers, yes?  NO.

Instead of an initial public offering (IPO), Spotify is considering a ‘direct listing’ – which is, what???

In such a deal, Spotify would likely issue no new shares. It wouldn’t have to hire an underwriter. Existing shareholders won’t pre-sell any of their shares to new investors. No lock-up periods or dilution for shareholders. Rather, shares will simply begin trading at their current levels – presumably on the NYSE. The company is consulting with Morgan Stanley, Goldman Sachs, and Allen & Co. on the process.

A direct listing would save Spotify investment banking fees, and it will enable Spotify to sell its shares at their true market value – not at some artificially low price set by the lead underwriters. It’s a faster, easier and cheaper route to the same route as an IPO.

A direct listing, however, carries some risks. Shares may carry a connotation of not conforming to Wall Street standards – which may be construed as something of a negative. Spotify management may have to work harder to persuade shareholders to make a long-term investment – something that underwriters would do during the typical dog-and-pony shows. And, without underwriters providing deal support, there’s no guarantee of a nice day-one pop – which is crucial for high-profile listings of consumer tech brands like Spotify. [Click here for Fortune’s take on the risks.]