Spotify opens at $165.90, valuing company at nearly $30 billion

by Susie Olson April 4, 2018, 1:42
Spotify opens at $165.90, valuing company at nearly $30 billion

Shares of Spotify debuted at $165.90 and teetered in the first hour of trading. Spotify is going public at a time when there is pent-up demand for new tech IPOs.

Deciding to go public on Tuesday, 3 of April, 2018, via a floatation on the New York Stock Exchange market means that the company value could potentially be between $20 billion and $25 billion (N7.2trillion and N9 trillion) according to analytics.

After initially spiking as high as $US169, shares eventually slid to close at $US149.60, according to Markets Insider data.

The direct listing was seen as a test case for other companies tempted to list without selling new shares, and for bankers that could lose out on millions of dollars in underwriting fees for future initial public offerings. It's the stock-trading equivalent of opening a store and hoping people will just stop in. Drew Pascarella, lecturer of finance at Cornell SC Johnson College of Business, says that Spotify's unorthodox listing is a one-off, unique situation as the company does not resemble classic pre-IPO firms. Spotify announced, via a tweet published Thursday, that it now has 70 million paid subscribers.

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"The attraction of the music-streaming service probably lies in Spotify's strong market share and rapidly growing revenues", Khalaf said. Estimates for the price of the shares once they hit the public market were between $160 and $220, CNN reported.

"Normally, companies ring bells". By 1:30pm EDT, the Wall Street Journal was reporting that Spotify was now valued at $30 billion, meaning that this could prove to be the third-largest IPO ever after Alibaba and Facebook.

"Spotify is not raising capital, and our shareholders and employees have been free to buy and sell our stock for years", 35-year-old chief executive and co-founder Daniel Ek said in a blog post Monday ahead of the listing of "SPOT" shares. "While I appreciate that this path makes sense for most, Spotify has never been a normal kind of company". "Spotify playlists have grown to 31 percent of user listening, highlighting an increase in platform engagement in addition to passive consumption".

The NYSE had set a reference price of $132 for the stock, though the actual price will be determined by shareholders. So far, none of have lived up to that title - though the competition remains fierce.

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