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Spotify shares open for trading at US$165.90

04 April 2018

Since launching its service a decade ago, Spotify has overcome resistance from big record labels and some major music artists to transform how the industry makes money.

Spotify Technology SA on Tuesday completed the largest-ever direct listing, valuing the world's leading streaming music service at as much as $30 billion, but its shares stalled after an early spike.

In a blog post Monday, Ek said he is proud of the streaming service, but Tuesday's debut on the New York Stock Exchange wasn't the company's top focus.

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Case in point: Dropbox, another mature but unprofitable billion-dollar tech company facing a similarly daunting list of rivals, is up more than 40% from its IPO last month. The Wall Street Journal recently reported that the iPhone maker could overtake Spotify in the soon as this summer. Spotify's current chief financial officer, Barry McCarthy, held the same job when Netflix went public and remained in that position until leaving the video service in 2010.

Track Spotify's stock in real time here. The company said it brought in about $5 billion in revenue in 2017, up 39% year over year, and a net loss of about $1.5 billion.

2012, at the Pre-Grammy Gala & Salute to Industry Icons with Clive Davis honoring Richard Branson, in Beverly Hills, Calif. Spotify stock debuted on the market with a boom, opening at $165.90 in an unusual "direct listing". While Spotify's cumulative number of paid subscribers is growing, it's not growing as fast as Apple Music's. The company's management said the firm didn't actually need to raise money, like most companies that IPO do.

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It faces tough competition from the second-largest streaming company Apple Music, which has 38 million subscribers.

In February, the shares were valued at about $20 billion based on private stock transactions among existing investors. Many of these employees typically would have been barred from selling their stock for at least 180 days in a traditional IPO, Kennedy from Renaissance Capital said. Instead, it's completing a direct listing. In addition, Spotify made a commitment to their original investors over a decade ago that they will be able to profit from their investment and this seems like the flawless opportunity.

Today marks Spotify's entrance into life as a publicly-traded company, and how things go might very well dictate what the IPO market looks like going forward...blah blah blah.

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Analysts had anxious ahead of Spotify's direct listing that forgoing hiring investment banks as underwriters or holding traditional promotional events with institutional investors could mean volatility once formal trading kicked off. It is also not known at what price the stock will start trading Tuesday.

Spotify shares open for trading at US$165.90