Record-setting direct listing makes Spotify a $30 billion firm

The Market In 5 Minutes China Tariffs Zuckerberg Spotify Model 3 Deliveries And More

The Market In 5 Minutes China Tariffs Zuckerberg Spotify Model 3 Deliveries And More

"Today's stock performance is no guarantee of future success, and it's important to remember that Spotify is not yet profitable and faces intense competition from more diversified players like Apple, Google and Amazon, all of which are pushing voice-activated devices that prioritize their own music services", Verna said. Investors had initially pegged the company's value at $30 billion when the market opened. But Spotify is based in Stockholm, Sweden, not Switzerland.

Chase Coleman's Tiger Global Management owns almost $2 billion of Spotify Technology SA, making it one of the biggest shareholders of the music-streaming company that started trading Tuesday. Unlike a traditional Initial Public Offering, Spotify conducted a direct listing, meaning no banks underwrote the offering and no price was set ahead of the debut.

The public markets will essentially only determine what Spotify shares will be worth when they start trading.

In comments made to US News & World Report, Michael said, "The direct listing is a focal point for other cash-rich companies who don't need to use the capital markets to raise money but still are seeking an alternative path to liquidity". Shortly after its debut, Spotify stock fell below $150 a share.

Spotify took an unusual route to going public through the direct listing.

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The NYSE set Spotify's reference price late on Monday to be in line with informal, private trading of Spotify shares, giving an early estimate of the level at which supply and demand could be balanced.

At $26.5bn at the end of the first trading day, Spotify ranks in the top 10 largest U.S. tech listings. Facebook and Alibaba Group Holding remain the largest tech stock listings in recent years.

Spotify is often credited for reversing a tide of declining revenue in the music industry and a year ago, profits rose to their highest level in a decade, largely thanks to paid subscribers.

That means the $97.30 gain is exclusively to Sony, and was calculated after the company made royalty payments to artists and indie labels. However, reports suggest that Apple Music isn't far behind Spotify in the United States and is expected to surpass 36 million paid subscribers globally by the summer.

The good vibes surrounding Spotify stem from its early lead in music streaming - a still-evolving field trying to hook people on the idea that it's better to subscribe for online access to millions of tunes than to buy individual albums and singles.

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